I want to advertise a franchise business. What do I need to know?

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Table of Contents

• Franchise Agreement
• The Franchise Territory
• Intellectual Property
• Conclusion

If you have purchased a franchise and you would like to start a campaign to advertise the franchise, there are a vast number of options at your disposal.

With the advent of social media, it has become much easier to launch campaigns to a broad demographic quickly and quite inexpensively. There are, however, a number of legal issues that you should be aware of before you start to advertise the franchise business.

Franchise Agreement

The Franchise Agreement summarises all your rights and obligations in relation to your franchise business, a number of which may relate to advertising.  The franchisor may have created a marketing fund, which requires franchisees to make monetary contributions to pay for a marketing campaign for the franchise network. Depending on the level of exposure your franchise business gets from this marketing campaign, you may not need to engage in an individual advertising campaign. The franchise agreement can often also require you to spend a certain amount on local advertising in addition to any contributions you are required to make to the marketing fund.

The Franchise Territory

The franchise agreement will also define the franchise territory in which you can operate your business. Some franchisees are granted an exclusive territory for their franchise business.  An exclusive territory is an area within which the franchisee has exclusive rights to provide the goods and services under the franchise to the exclusion of all other franchisees from the franchise network. A variation of the exclusive territory is being granted an exclusive marketing territory where you have exclusive rights to advertise your business within the territory to the exclusion of all other franchisees from the franchise network. You should be careful to fully understand any restrictions imposed on you in relation to advertising to avoid any possible breaches through inadvertently advertising in an area that is the exclusive domain of another franchisee.

Intellectual Property

Another key issue to consider when advertising is the use of the franchisor’s intellectual property, more particularly their name and logo. The franchise agreement usually outlines your rights in relation to use of the name and logo and you often require the written consent of the franchisor before using the name or logo for advertising purposes.

Conclusion

A well-planned advertising campaign can be key to the success of your franchise business. Before establishing any marketing plan, you should familiarise yourself with your rights and obligations under the franchise agreement. We always recommend you speak with a franchise lawyer to help you understand your options and ensure you create a marketing campaign that does not breach the franchise agreement when you choose to advertise the franchise business.