Where the Brand Fund Goes: Using Email to Show Franchisees What Their Marketing Fee Buys
Ask a franchisee about the brand fund and you will often hear the same question: what do we actually get for it? They see the contribution leave their account every month. They see a national campaign now and then. What they rarely see is the fund working in their own location, for their own guests.
That gap is a communication problem as much as a marketing one, and email is one of the best tools a franchisor has for closing it.
What the disclosure document already requires
In the United States, the FTC’s Franchise Rule sets out what a franchisor must disclose about advertising funds in Item 11 of the Franchise Disclosure Document. Under 16 CFR 436.5(k)(4)(v), the franchisor must state who contributes to the fund, how much franchisees contribute, whether franchisor-owned outlets contribute on the same basis, who administers the fund, whether it is audited and when, and whether its financial statements are available to franchisees. It must also state how the fund was used in the most recently concluded fiscal year, including the percentages spent on production, media placement and administrative expenses.
The rule also asks franchisors to explain how they use any funds left unspent at the end of the year, including whether franchisees receive a periodic accounting, and to disclose what percentage of advertising funds, if any, is used principally to solicit new franchise sales.
Why an annual disclosure is not enough
The disclosure document is accurate, but it is written for legal review and read closely when a franchisee signs, not every month after that. A line saying a share of the fund went to production does not tell a location owner which campaigns were produced, whether their store used them, or what happened when it did.
Franchisees judge the fund by what they experience locally. If corporate produces strong campaigns that never reach their guests, the fund feels like a tax. If the same campaigns arrive ready to send and bring guests through the door, it feels like an investment.
Turn production into finished local campaigns
The most visible part of the fund is the work it produces, so make that work easy to use. Instead of sending locations a folder of assets, give them finished email and text campaigns with the brand’s design, copy and offer already in place, plus a short list of local fields such as hours, events and featured items. A campaign that takes a manager two minutes to review is far more likely to be sent than one that takes an afternoon to assemble.
Every campaign a location sends is the fund showing up in that location’s market, under that location’s name.
Send a one-page fund update every month
Between annual disclosures, a short monthly update keeps franchisees informed. Keep it to one page:
- The campaigns produced this month, with a thumbnail of each.
- Where the media budget ran, in plain language.
- How many locations sent each local campaign, and whether theirs did.
- The results for their own location: sends, clicks and redemptions.
- What is planned for next month, and the deadline for local details.
Sending the update by email has a useful side effect: franchisees see the brand’s own email standards in their inbox every month.
Bring the advisory council into the calendar
Many systems have a franchisee advisory council or a marketing committee. Share the draft campaign calendar with it before the month starts, and ask which campaigns locations are most likely to use. Franchisees support plans they helped shape, and they will tell you early when an offer does not suit their market. Report back to the council each quarter on which campaigns locations used most, so the next calendar builds on what was actually sent.
Check the details with counsel
Fund rules vary with each franchise agreement, and some states add their own franchise requirements. Before changing how the fund is reported or used, confirm the details with franchise counsel. The monthly update should match what the disclosure document and the agreement say, never contradict them.
Make the fund visible where it counts
The simplest way to show franchisees what the fund buys is to put finished campaigns in their hands and make sending them easy. That is the model behind Nexmail’s on-brand email and SMS for every franchise location: corporate sets the strategy and approves the templates, Nexmail creates the campaigns, and each location reviews, personalizes and sends, while corporate keeps control of templates, fonts, colors, logos, legal copy and permissions.
When every location can see the fund at work in its own market, the question changes from “what do we get for it?” to “what is coming next month?”
