Dunkin Donuts, Jack in the Box, Subway… agency? Franchises aren’t just for food anymore –with chain shops popping up around the US, media outlets are beginning to take interest in this unconventional format. In a recent AdAge article, Alexandra Bruell delves into the franchise model with a focus on ViaMark, an East Coast-based agency that has been offering franchise options since 2004. Under ViaMark’s watch, franchisees are given access to the corporation’s resources, like bookkeeping, in exchange for their monthly and yearly royalties. Each franchise is responsible for securing its own clients, paying for its production costs and overhead, and managing profits and losses. You get the basics – but is it a good idea?
So, there is one good thing going for the franchise model, and that’s the fact that it’s cost-effective for the agencies themselves. Stephen Facenda, a ViaMark franchise owner, reportedly set up shop with just $100,000; a low number when comparing startup costs to many independent agencies. However, that’s where the benefits end.
First of all, you’re essentially outsourcing all of your creative work. You may have a local “CEO” and maybe an account manager or two, but the rest of your primary thinkers are holed up at Franchise HQ or dispersed throughout the country. Franchises are losing out on the opportunity to build a solid agency team and allow them to grow with the company and clients. There’s also no room for the collaboration that truly makes an agency an agency, meaning no spur of the moment regroups, no late-night brainstorming sessions that end in brilliance, no real rapport between workers. “Great work comes out of really talented and committed people working collaboratively and following some ethos,” asserts consultant Charles Day. When a team is constantly working remotely, there will always be a “natural cap” to creativity and quality. Not only does this put the agency at a disadvantage, it really does a disservice to clients. Rather than have a dedicated set of workers contribute to their deliverables on an ongoing basis and truly understand their brand, they’re relegated to whatever remote worker fulfills budgets and timelines for the short term.
Next, your success trajectory is on a tight leash. The franchise model keeps its subsidiaries limited to hyperlocal clients only. Even if an agency felt they had the bandwidth to go for the Nikes and Cokes of the world, they wouldn’t be allowed to do so. Working with local clients is great – there’s a simple transition into brand understanding, easy communication, and even a ready-made bond – but for agencies in smaller cities, being mandated to work with them exclusively would severely limit their ability to develop. Finally, there’s a definite cap on independence. Everything franchisees execute must circle back to corporate in some way. While they are independently responsible for their own success or failure, they still have to fit into the corporate vision. In any freestanding agency, even one with multiple locations, there are of course rules, expectations, and higher-ups reviewing work. However, the company makeup and culture allows for dialogue and creative exchange, rather than a one-sided conversation.
While saving funds is always a good thing, quality of client work and autonomy are never things you should sacrifice. In this case, it’s best to stick to the old school model… if it ain’t broke, don’t fix it.
Find out more about Mindgruve’s client wins and how we operate at Mindgruve.com.