Category : Marketing

Five Essential Elements of a Successful Franchise Advertising Co-op

Five Essential Elements of a Successful Franchise Advertising Co-op

On paper a franchisee advertising co-op looks like the perfect advertising situation. However, how well it works can vary widely depending upon how it is managed. Owning a franchise with multiple owners in a single market allows you to contribute a small budget to a master fund. That master fund is supported by similar contributions from other fellow franchisees. The fund soon becomes a formidable advertising budget that can compete with larger companies. And, you have an advertising plan that is many times larger than what you can afford on your own.

Yet, there is no guarantee that co-ops will achieve that ideal situation. While they are a great deal for a franchisee, there are many ways for a co-op to go wrong. You can ensure your ad co-op will be a success by following a set of simple rules.



Set up the basic rules of the co-op for everyone to follow. The foundation of the bylaws are typically provided by the franchisor. This includes establishing voting rules and minimum contribution requirements, as well as the steps taken if a franchisee fails to make their contribution.  Without these essential elements as a part of the franchise agreement, the co-op is almost certainly doomed to failure.



The franchisees in the co-op should be the ones who oversee the finances. A member of the group, an accountant, or their agency can handle the management of the funds. But, whoever does it, the co-op members need to have total and ongoing access to all money matters. The slightest distrust of budget allocations will create accusations and distract from the mission of the co-op. Not everyone will always agree on the allocation of funds. However, all allocations need to be clearly reported so discussions are about the co-op’s decisions and not about questioning how it was used.



In almost every franchise group, there are one or two people who own more franchises than the rest. They can dictate the vote on any and all matters, either on their own or with another franchisee. The best groups include franchisees with extra voting power who listen to and respect all members. This keeps all members engaged, which generates more ideas and helpful discussions.



An advertising agency that has experience in working with franchise co-ops can bring leadership and objectivity. A good agency will know how to structure a strategic media buy and get it at the lowest cost. They will know how to leverage your budget for added value with promotional activities or no-cost spots. They will provide you with branding consistency, audience delivery reports, cost projections, and help manage the details of your co-op for you.



Along with sharing the cost of advertising, franchisees can share sales and operational information. This is an advantage most businesses don’t have. Sometimes a marketing tactic will work for some and not others. Often, discussing it will reveal what makes the difference in how well a campaign works. Franchisees can also share tips on operational tasks, including production, scheduling, customer engagement…the list goes on. You are not competitors, you are a self-help group.  The more openly your group shares information, the more you will all learn and grow.


An advertising co-op is one of the greatest advantages of owning a franchise business. The financial benefits and shared information greatly improve your chance of success. The tips outlined above are not secrets. They are simply good rules to apply to any relationship: create and honor expectations, use professional guidance, respect others, and create a culture of openness and honesty. Do this, and you will enjoy the benefits of a strong, efficient advertising co-op.

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