According to this year’s bfa/NatWest franchise survey, just over half of all franchisors charge a separate on-going fee as a contribution to the advertising of the business. On average this is 3.6 percent of their turnover. bfa deputy director Simon Wise says: ‘Member franchises abide by the bfa`s strict code of ethics and ensure that all advertising, marketing and public relations contributions are used for the overall benefit of the network.’

This includes paying for mainstream media advertising, on television and in the national press, and high profile marketing campaigns, which individual franchisees then benefit from.

Ken Rostron, a consultant with The Franchise Company, an affiliate member of the bfa, says: ‘More franchises are spending on national television and radio advertising, which is another indication of a maturing industry. It gives the individual franchisee a level of exposure that an independent operator could never achieve, and that is a significant factor in the high success rate of franchising.’

In many cases, it is the franchisees themselves that have the biggest say in how these funds are allocated. Fast food franchise Subway, a full member of the bfa, has 300 stores in the UK and Ireland, and a target of 2000 stores by 2010. Advertising is governed by the Subway Franchisee Advertising Fund Trust (SFAFT), which functions independently of Subway Restaurants. Franchisees pay an advertising fee of 3.5 percent of their turnover to SFAFT, which in turn creates the advertising and marketing campaigns designed to build restaurant sales and promote the company's image. Decisions on how to spend the money are taken by elected boards, which include five franchisees.

Subway development agent Deirdre Anderson says: ‘The bulk of the money goes on television, radio, press and billboard advertising, but it has to benefit all the stores in the market. Another major benefit for the franchisees are the economies of scale that SFAFT can achieve.’

Franchises in the services sector have started to include national television advertising in their network marketing strategy. Oven cleaning franchise Ovenu, also a full member of the bfa, has advertised its services on digital channel UK Food. Founder Rik Hellewell says: “That level of exposure significantly boosts sales throughout the network and creates a distance between us and our competitors. But you need to be able to handle the high volume of telephone enquiries that result. We use computer software that recognises the STD code of the incoming call and diverts it to the franchisee operating in that area.’

Like Subway, Ovenu leaves the decision making on advertising spend to its franchisees. ‘It is their money,’ says Hellewell. ‘We have a committee - three franchisees nominated from different regions – which decides the best way of allocating the funds for the benefit of the whole network.’

For more information on franchising visit the bfa website at www.thebfa.org