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Franchise Update Media recently released its 2025 Annual Franchise Marketing Leadership Report. The AFMR is a survey of top franchise marketing executives that provides insights into the latest consumer behavior trends, innovative marketing strategies, technology, and the impact of digital transformation on franchise businesses.
The AFMR is the first and only report dedicated to B2B and B2C franchise marketing leaders. It includes perspectives from industry experts about the evolving market dynamics and how franchises can stay ahead of the competition. This report delivers data collected from franchisors across the franchise community with responses organized by industry, marketing budget, system-wide sales, and more.
The annual report provides franchisors with the ideal resource for studying their marketing investments, benchmarking their sales and advertising budgets against their own industry categories, as well as setting goals and budgets for the year ahead. The AFMR also includes research into digital advertising practices, the growing investment in mobile and social platforms, and best practices in building marketing teams.
Over the last several years, the AFMR was expanded to include more information about online reputation management and the use of artificial intelligence (AI). It starts by identifying how many franchises are using AI and in which ways, along with their confidence in using the technology. It also looks at how the integration of AI has impacted the customer experience, its challenges and limitations, and their plans for future investment in AI. The report also explores franchisee involvement, franchisee training and support, and feedback from customers regarding the use of AI.
One of the biggest advantages of joining a franchise system is that an owner can benefit from a large and broad marketing system to attract customers. Having the resources and visibility to promote the brand to a wide audience helps bring in new business while allowing owners to oversee the operational aspects of the franchise.
The latest AFMR looks at the percentage franchisees contribute to local, regional, and national marketing funds. It also examines how that budget is allocated in general and within digital advertising. Responses are also broken down by franchise sector.
We first asked franchisors if their franchisees contributed to a national marketing fund. Every retail (non-food) franchise said that it was the case. The other sectors each ranged around 80 percent – food (78 percent), retail food (78 percent), service/brick and mortar (79 percent), and service/non-brick and mortar (80 percent).
The survey then asked what percentage of the franchisees’ revenue contributes to a national marketing fund. The vast number of responses, regardless of sector, indicated that 1-2 percent of franchisees’ revenues go to a national marketing fund. The biggest outlier to that response is that a third of service (brick and mortar) franchises responded that their franchisees contribute three percent to their national marketing fund.
While the national marketing fund is the primary advertising program, some franchises also have other programs on a local level. Generally, a little less than half of the franchises surveyed had a local co-op or local or regional marketing funds in which franchisees contribute. The primary outlier to that response was with service franchises (non-brick and mortar) that said only 13 percent of their franchisees contribute to a local or regional marketing fund.
We then asked survey respondents what percentage of their revenue is contributed to a co-op, local, or regional marketing fund. The majority of the responses were between one and three percent. Fifty percent of service franchises (non-brick and mortar) said that five percent of their franchisees’ revenues go to a co-op, local, or regional marketing fund.
We also wanted to see where the funds for the primary national marketing funds were allocated. There was a wide range of responses, but the biggest percentage of funds went to digital advertising, regardless of the franchise sector. Social media and website generally had the next highest percentages of responses from all sectors.
With digital advertising being the most popular form of marketing, the AFMR drilled down further and asked franchisors how their digital advertising budget was allocated. Pay-per-click on search engines such as Google and Yahoo were the most popular responses, followed by social media. This question received a broad amount of responses with seven other categories for digital advertising programs.
For more information about the 2025 AFMR and how you can purchase the report, read more HERE.