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I love the way things are headed and thank you Cody for allowing shorts to be worn. I was not worried about the shirt, just the pants issue. One more question. Is any of this leading to the possibilities of a national commercial? I can understand how expensive it is. It varies from market to market, state to state, country to country. One franchise a friend of mine owns has a deal where the franchisee pays $300 a month and this gets him TV, Cable commercials as well as radio, newspaper, etc.. 300 sounds high per month but he makes it back in the first day or two. I know it has been up to us on commercials and what not but just thought I would ask?
Mike Nowlin
Mike,
Remember the old saying, “Be careful what you wish for.” One of the great things about Heaven’s Best is that they don’t take a percentage of our revenue. Many other franchisees pay a fixed percentage for marketing and their corporate is free to use it as they see fit. While you may want to see a national TV ad, other operators may not. There are plenty of operators who do just fine off of their Yellow Page ad, for example.I would be interested and might consider contributing towards the development of a commercial or two for our use at the local level, however, I would not like to see corporate start running national ads with us paying continuously towards the cost.
Thanks,
Mike
I’m with Mike. Also, any coorporate style advertising like that raises a lot of additional questions. Just a few are:
-Is the price per month/per territory? In other words, do I have to pay the monthly fee per territory if I own multiple territories? If that’s the case, that could get really expensive really fast and if it doesn’t pay off it could really hurt some operators.
-Are people in large markets going to see more of a benefit than small/rural areas depending on how/where the ads run? Sucks to be forced to pay into any form of advertising that doesn’t benefit you.I consider it similar to paying taxes. How much do you want government to do for you and at what cost to you? This is obviously just an example and not in any way meant to slight cooperate, but in ways I think it is an applicable example.
I agree – it would be great if HB developed some ads which we could utilize on the local level if it is desired – just like the print ads they are developing now. Some larger metro areas may want to coop together and share the costs. Ads could be developed so that local ph#’s etc. could be tagged on the end. I don’t want to try and develop a national advertising coop however! There would never be enough money in an organization our size to do anything with an impact!
No, I wouldn’t want to be required to chip in. I agree that the exposure is good, but more in metro areas and not so much in rural. Also, I’d be concerned with the pricing be set for me.
I agree with all of you to a certain extent.
Kevin Harrison: Yes it would be great exposure for me because I live in a populous of 500,000 plus. I agree that it would not be very smart to do this in rural areas but why would you open a carpet cleaning franchise in a rural area to begin with.
Mike Bishop– No one is asking to take a percentage of our revenue. I’m giving an example of a flat rate which, by the way, has helped the company I am talking about in my first post to grow from 8 franchises to 30 in just this past year. You can’t argue with those numbers. Those 8 I am talking about have made an average, per franchise, of $500,000 just last year. So ponder that for a while.
Devlin– Yes, it is per territory. Review numbers above. The last comment you made about “sucks”; what is our company doing to us at this moment.
Daveinpa– Ditto right back at you.
Trust me guys. I simply ask this question because their are benefits and drawbacks ofcousre. For big city operators it would probably pay off. For rural areas it probably wouldn’t. Depends on how rural we are talking about.
Mike
Mike Nowlin,
I don’t think any of us intended to hammer you. If it felt like we did, I apologize. I for one realized that you were simply asking a good question. I believe we were just replying with our opinions.Your friend’s franchise has indeed realized good success. You did mention a flat rate and I responded mentioning a percentage. Concerning your post, my mistake.
I mentioned a percentage of revenue because that is a very common practice in franchise systems. For a larger company, which we are, the advertising dollars that franchisees send in may or may not come back to their specific areas. The corporate offices frequently use the combined funds as they see fit and may or may not run ads in your area. It is great if you are in the area that corporate chooses to run ads for. But the individual franchisees are usually not in control and it is difficult to work it out where it feels fair for everyone in a large franchise system.
Shared marketing/advertising money pooled together to produce a good ad campaign can no doubt have many advantages. We all joined Heaven’s Best for our own specific reasons of course, but the lack of mandatory marketing money (fixed or as a percentage) from each franchisee was one of the things I liked and was a major part of my decision to go with Heaven’s Best.
I came across a specific bit of cautionary advice from numerous sources when I was researching what small business I would start. This advice was directed at anyone considering buying a franchise. The advice more or less cautioned you to be very careful that you don’t buy yourself a minimum wage job when buying a franchise. If you look at the financials and revenue split for some franchise systems you can see that many are heavily slanted towards the corporate office. I personally believe Cody will never be that greedy with us and I like our arrangement.
Thanks,
Mike
I would assume that this is actually in the future if corporate “really” wants to take the company to the next level. If I were setting up an advertising fee, I would have it based on the territories owned. Say, $x monthly per territory. That would be the only way to do it as we all know territories are “usually” based on population. As far as corporate managing how the funds would be distributed, wow that would be tough. They would need to hire an individual just for this purpose. I for one would look forward to an advertising fee in exchange for some quality local marketing.
This is a very touchy area that would necessitate a well thought out plan. I look forward to the day when I’m watching a show on TV and see our commercials running or maybe corporate could sponsor a NASCAR team $$$$ ;). We’re at least 5 years away from this even being possible. We need to be about triple the size overall.
I don’t know if something like this would ever develop within HB, but there are some good models out there. Subway for instance probably has the most franchissee representative system. There are franchissees which are elected to serve from each market region who together with a national advertising firm develop the plan. Then on the local & state levels there are also elected boards of franchissees which determine how the local funds are spent – usually together with a regional ad firm. Having served on these boards myself, I can tell you it is a very fair system to get the most bang for your buck with input from throughout the chain. But it took Subway until they had somewhere over 4000 units before they could really do hardly any tv on a national basis – that’s how expensive it is! Local markets on the other hand can choose to coop together and be very successful also. With this plan it would still be essential that corporate still develop a 30 & 60 second video commercial to be available for local coops to use and tag with their own ph#’s etc. Wow – that probably will happen in the not so distant future!
I don’t believe what I’m reading. Nationally would be awesome! The whole basis for the changes being made are to make Heaven’s Best the #1 franchise in the country in our field. It is so discouraging to read that most everybody wants things the same. Chem-Dry, Stanley Steemer, Servicemaster Clean, Sears, all are successfull, all have patches on their uniforms, all advertise nationally, and all are taken very seriously. The saying goes “you have to spend money to make money.” I believe that is 100% true. Let us all embrace the changes made and it will benefit everybody. CHANGE IS GOOD! 😀
And each and every one of those franchises is paying a rather hefty percentage of their monthly gross to pay for that advertising and exposure.
I know for a certainty that it is in the 8-11% per month of the gross being paid. That was one of the major factors why we purchased a HB franchise, no percentage payout, or other hefty monthly fees. Check it out for yourself.
@daveinpa wrote:
I know for a certainty that it is in the 8-11% per month of the gross being paid.
I’m going to have to disagree with this statement. Advertising fees are rarely over 1-3%. Maybe 8-11% total for royalty & advertising.
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