As a coffee shop franchisee, this article about Timothy’s sampling campaign raises some questions that should be asked by any franchisee or prospective purchaser of a coffee shop franchise. Here are the questions you should ask your franchisor:
1. Will you provide the sampling team or do I have to train and hire my own?
2. If you will train and set up this sampling team, is that coming out of my marketing pool?
3. If the marketing pool is being used to fund this sampling team, can you guarantee that my little store will have an equal share of the exposure or will you only focus on the ‘high profile’ locations?
Believe it or not, but there is at least one coffee shop franchise chain in the Vancouver area that not only expects their franchisees to pay for such sampling on the streets (labour and COGS) in addition to their marketing pool, but also insists on handing out 2 for 1 coupons while doing so. When the customer comes to the till to pay (usually with a happy face which is always nice) for their one drink, the franchisee hands them two drinks and, get this, pays a royalty on the losing transaction! It’s one thing to have to take a loss in the name of marketing (standard business) but it’s something quite different to have to pay a royalty on that transaction. For non-math students out there, this equates to a bad deal for the franchisee.
If this is your situation, why not ask your franchisor to train, send out, and provide the product for your sampling program from the marketing pool? If they are not interested in this discussion, at least ask them to assure you that you will not be paying at 8-10% royalty fee right off the bottom line of the transaction!
This raises a more important discussion topic – How do you pull together a group of fellow franchisees to discuss such things? This is where your FAC (Franchisee Advisory Council) comes into play. Search this website with ‘FAC’ for more information on this important topic. The VCSFA is dedicated to helping you start your own FAC so that these kind of discussions can start to take place.