Franchise Tip #2: Networking with other franchisees in your region has many benefits, including reducing costs of doing business.
There are some tangible benefits that come along with getting to know other franchisees in your system, aside from the camaraderie fostered by sharing ideas, concerns and advice with people who share the same interests, goals and objectives in running a business.
Perhaps one of the biggest advantages to collaborating with other franchisees comes from the possibility of pooling money and resources for marketing initiatives. There’s a lot more buying power for expensive methods of advertising, such as purchasing television and radio spots.
Brad Chasteen owns the largest number of Moe’s Southwest Grills in that company’s system in territories that encompass Northeast and Central Florida, and Washington, D.C. Moe’s franchisees in Florida formed a statewide marketing co-op in the Sunshine State that “benefited the whole brand,” Chasteen said.
The franchisees partnered with the state’s most popular college football teams, the Gators and Seminoles, on a promotion that allowed fans who responded to a contest to watch a game from the announcer’s booth at the stadium.
The promotion brought brand awareness to all the participating franchisees with the Moe’s logo appearing during broadcasts and re-broadcasts of the football games; and informational spots attracted customers to existing locations by encouraging participants to visit a Moe’s restaurant to register for the contest.
Co-op advertising is also a benefit for Anytime Fitness franchisee Andy Gundlach who meets with four other franchisees in his direct marketing area of Madison, Wis. In addition to mass marketing he does independently for his own 18 units, he bands together with the other franchisees for larger promotions and more costly advertising.
“On a per-club basis, it makes things much cheaper,” Gundlach said. “You can definitely get your costs down by collaborating.”
Savings on Supplies
Savings can also be achieved on such things as supplies that are used by all franchisees, said Chasteen of Moe’s.
By comparing notes, franchisees can analyze costs for different items and come up with solutions for reducing expenses that are too high. He and his fellow franchisees discovered that during a meeting and ended up switching to a vendor that offered lower costs when the colleagues purchased paper products as a group.
“We saved about 2 percent of our paper costs by switching to another vendor when we consolidated all of our guys together,” he said.
Savings on Shipping
In retail, the savings can be seen in shipping costs, according to Jim Ullrich, who owns a Wild Birds Unlimited store in Gig Harbor, Wash. He keeps in regular contact with other franchisees in his area, especially those in close proximity to his store. By ordering inventory together, they can be eligible for shipping discounts.
It also helps save money on special orders. If Ullrich has to order just one item that’s out of stock, and the order requires a minimum purchase, he’ll call up another franchise partner to see if they have any orders to make. That way, they both are spared from additional fees.