Local Commerce Monitor, Wave 16 - Franchisees of National Companies

LCM Wave 16 Spotlight:
Franchisees of National
Companies
April 2013

2BIA/Kelsey Local Commerce Monitor™ (LCM), Wave 16, Q3 2012
Proprietary and Confidential. Copyright © 2013 BIA/Kelsey. All Rights Reserved.
LCM:Franchisees
Executive Overview
 Franchisees have aggressive plans for media spending, including for digital/online
media over the next 12 months.
 They’re sophisticated media users. They see the highest ROI from mobile, social
and video advertising.
 Franchisees spend about 2.5 times as much on average for their online presence
as SMBs in the full LCM sample. They have a diversified and robust online
footprint.
 About two-thirds of franchisees have a presence on Facebook. They value
customer reviews and opinions more than other SMBs. They typically monitor this
activity through digital product bundles rather than stand-alone solutions.
 Franchisees are heavily engaged with their customers, with 87% reporting they
frequently track sources of leads and 75% using some sort of CRM system. They
give the highest quality ratings to in-person and website-form leads. More than
70% offer a customer loyalty program.
 Franchisees use agencies/digital agencies at almost twice the level as the full
LCM sample (37% vs. 20%), underscoring the importance of channel sell-through
efforts.

LCM:Franchisees
Selling to Franchisees
 They Like Personal Contact and Education
Franchisees like face-to-face contact with their sales representatives – 45% rate an in-
person visit as “extremely important”. In a self-service environment, they value
tutorials, performance guarantees and discounts (on media purchases).
 They Are Media Savvy
Franchisees are strong in digital advertising, while continuing to use traditional media.
They see mobile and social media as providing high ROIs. They know what works –
nearly all track lead sources and three-quarters use some type of CRM.
 They Already Have a Strong Digital Presence
Given their robust online footprint and high level of spending for online
presence, franchisees are good customers for a variety of online services. Given their
general inclination towards data and analysis, there are opportunities to include
tracking, analytics and online management services in the mix.
 They Want Help in Engaging Customers
Franchisees are trying to engage their customers in many ways (using social and mobile
media, tracking customer comments, offering loyalty programs, etc.). Franchisees are
likely to be receptive to solutions that improve customer engagement, possibly by
connecting various programs and platforms.

LCM:Franchisees
Franchisees Spend More on Media in General and
on Digital/Online
 Franchisees are more aggressive advertisers than average SMBs, with Net
Increasers on media spending at 51.6%. Given these intentions, they’re good
candidates to increase their media spend and make multi-product buys.
 Their ad spend is higher than for average SMBs. And they appear to understand
the value of advertising – with the great majority tracking lead sources and using
some type of CRM system.
 Franchisees’ faster than average adoption of digital products makes them good
prospects for a wide array of digital/online media.
 A larger percentage of their ad budget (32% vs. 25% for the full LCM sample)
goes to digital/online media. Their use of mobile and social media is particularly
high.
 Franchisees also use significant amounts of traditional media. About one-third
use radio, magazines, TV, outdoor and direct mail. Nearly one-half use
newspapers.
 Nearly a third of those that currently use print Yellow Pages (31%) expect to
“significantly” increase their spending next year.

LCM:Franchisees
Franchisees Have Aggressive Spending Intentions
54.9%
3.3%
38.5%
3.3%
0%
10%
20%
30%
40%
50%
60%
Increase Decrease Maintain Not sure
Q104 Ad Spend Intentions in the Next 12 Months by Franchisee/Licensee
Sample Size = 91
Over half of franchisees plan to increase spending on advertising and promotion in the
next 12 months. This compares to net increasers of 39.0% for the full LCM sample.
Net Increasers:
51.6%
Source: BIA/Kelsey's LCM Wave 16, Q3/2012 (and prior waves, if relevant). Methodology: Online panels.
Full LCM sample is 600. Individual findings may not be statistically significant.

LCM:Franchisees
Franchisees Spend More for Digital/Online
32.4%
34.3%
0%
10%
20%
30%
40%
Last 12 Months Next 12 Months
Q301 Percentage of Ad Budget for Digital/Online Media
Sample Size = 75
Franchisees spend roughly one-third of their total media budget for digital/online media, higher
than the roughly 25% of budget for digital/online spent by the full LCM sample.

7
BIA/Kelsey Local Commerce Monitor™ (LCM), Wave 17, Q3 2013
LCM:Franchisees
65%
43%
39%
32%
30% 30%
28% 26% 26%
22% 22%
20% 19% 18% 18% 17% 15%
0%
20%
40%
60%
80%
S11- Advertising Media Used for Advertising/Promotion
Sample Size = 91
Franchisees Use a Wide Variety of
Digital/Online Media
Use of digital/online products, is high overall, underscoring a robust online footprint.
The use of numerous mobile and social media is particularly notable.
*In this metric, use is irrespective of spending level.
Percent of Franchisee Respondents
Using Given Media*

8
LCM:Franchisees
46%
33% 32% 32% 31% 31% 30%
26% 26%
24%
12%
0%
20%
40%
60%
S11- Advertising Media Used for Advertising/Promotion
Sample Size = 91
Franchisees Continue to Use Traditional Media
Traditional media remains a key element of the franchisee’s advertising mix.
*In this metric, use is irrespective of spending level.
Percent of Franchisee Respondents
Using Given Media*

9
LCM:Franchisees
Franchisees Rate ROIs Highest for Mobile, Video
and Social Media
28.6%
43.8% 44.4%
31.0%
25.0% 28.6%
20.8%
11.8% 11.4%
50.0%
31.2% 29.6%
41.4%
45.0% 35.7%
37.5%
41.2%
31.4%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90% Excellent 10-19x Spend Extraordinary Over 20x Spend
Q107
Franchisees give the highest ROIs to specific media in mobile, video, and social
media clusters (“top two box” ratings).
78.6%
42.8%
75.0%
74.0% 72.4%
70.0%
64.3%
58.3%
53.0%

LCM:Franchisees
Franchisees Spend Heavily for Online Presence
$41,376
$15,523
$0
$10,000
$20,000
$30,000
$40,000
$50,000
Franchisees Full LCM Sample
Q307
Sample Size = 75
Franchisees spend about 2.5 times as much on average for their online presence
as the full LCM sample. (Online presence includes: website; landing pages; social
media presence; local pages on portals like Google, Yahoo, etc.)

11
LCM:Franchisees
Franchisee Online Presence Continues to Grow
Their online presence is also more localized than average. Other attributes include:
 Higher use of paid search and listings.
 Preference for DIFM over DIY when it comes to the upkeep and management of
their digital presence: More than 80% pay outsiders to update their properties.
 Franchisees that use videos (including YouTube) hire a professional and prefer
custom overusing stock video.
 Use of product content to build awareness and SEO is aggressive: more than just
on page optimization.
 SEO is done through a mix of sources: Listings, blogs, like buttons, reviews and
tweets are ranked as the top activities.
Current online
properties:
53% Google Plus Page*
48% Landing Page
47% Yahoo Local
39% Mobile Website**
Online properties likely
to add in next 12
months:
31% Landing Page
31% Other Social Sites
30% Facebook Page
30% LinkedIn
*Also included Google Places Pages
**Defined as “version of website designed specifically to be displayed on a smartphone or other
mobile device.

12
LCM:Franchisees
Online Properties Comprise a Large Online
Footprint
4.4% 3.3% 5.5% 4.4% 4.4% 3.3% 7.7% 5.5% 2.2%
7.7% 7.7% 4.4% 8.8%
16.5%
13.2%
19.8%
15.4% 19.8% 17.6%
18.7% 24.2% 27.5%
22.0% 26.4%
26.4%
27.5%
22.0% 29.7%
22.0%
27.5%
25.3% 30.8%
26.4% 24.2% 25.3% 29.7% 25.3% 30.8%
25.3%
57.1% 53.8% 52.7% 52.7% 50.5% 48.4% 47.3% 46.2% 45.1% 40.7% 40.7% 38.5% 38.5%
0%
20%
40%
60%
80%
100%
Not sure Don't have, and not likely add next 12 months Don't have, likely to add next 12 months Currently have
Q303A
Sample Size = 91

13
LCM:Franchisees
57.8%
44.6%
38.6%
33.7%
2.4%
0% 10% 20% 30% 40% 50% 60%
Ask Customers
Clicks or Email
Promotions or Direct Mail
Call Tracking
Other Tracking
Q204
Sample Size = 83
Franchisees Are More Focused on Customer
Tracking
Percentages total over 100% because multiple responses were permitted.
Franchisees are more rigorous than non-franchisees about tracking sources of customer leads. This
finding is fully consistent with other findings about franchisees use of data and analytics.
Compared
to16.0% for
full LCM
Compared to
32.0% for full
LCM
Compared to
25.0% for full
LCM

14
LCM:Franchisees
18.7%
28.6%
26.4%
24.2%
31.9%
14.3%
25.3%
23.1%
45.1%
37.4%
40.7%
48.4%
40.7%
60.4%
53.8%
58.2%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Tweets
Blogs
Pay per Call
Claim Listing on Manta or Merchant Circle
Tries to Change Unfavorable Comments
Replies to Unfavorable Comments
Email Marketing
Like Button (or Similar)
Don't Do But Likely To Do In Next 12 Months
Currently Do
Q303B
Sample Size = 91
Franchisees Use Diverse Online Marketing
Activities
Franchisees report using many online marketing activities. For example, 60.4% report they
already respond to unfavorable online comments, with another 14.3% planning to do so
within the next 12 months.
81.3%
63.8%
66.0%
67.1%
72.6%
72.6%
74.7%
79.1%

15
LCM:Franchisees
Franchisees Have a High Level of Customer
Engagement via Social Media
More than 65% have a Facebook page and 32%
use Facebook ads.
 Three-quarters use their Facebook page as an
acquisition tool (vs. just 42% of the full LCM sample).
 Customer reviews and opinions are of high
importance, 78% monitor the comments online and
60% respond. They also post reviews on multiple
properties.
 Of those that monitor customer comments, about
one-half use a monitoring service that’s part of a
bundle of paid online services (reporting dashboard).
 Facebook, Google and other social sites rank highest
in importance on monitoring reviews (of online sites).
11.3%
19.7%
23.9%
21.1%
16.9%
7.0%
0% 5% 10% 15% 20% 25%
<$24
$25-$49
$50-$99
$100-$199
>$200
Not Sure
Spend on Monitoring Services ($/Mo.)
Vendors Used For Reviews
N=71

16
LCM:Franchisees
7.7%
3.3%
7.7% 8.8% 9.9% 11.0% 9.9% 9.9%
7.7%
9.9%
12.1% 8.8% 9.9% 8.8% 11.0% 9.9%
17.6% 19.8%
19.8%
15.4% 13.2%
19.8% 17.6% 22.0%
23.1%
27.5%
22.0%
28.6% 29.7%
23.1% 25.3%
26.4%
44.0%
39.6% 38.5% 38.5% 37.4% 37.4% 36.3%
31.9%
0%
20%
40%
60%
80%
100%
Google Facebook Other Social Other Sites Yelp Twitter Blog Citysearch
Not at all important Not too important Somewhat important Very important Extremely important
Q312 Sample Size = 91
Franchisees Give High Importance to Websites
with Customer Comments
They take customer comments seriously, with about two-thirds saying customer
opinions on Google, Facebook and Yelp are “Extremely” or “Very” important.

17
LCM:Franchisees
51.9%
28.4%
16.0%
3.7%
0% 10% 20% 30% 40% 50% 60%
Bundled Service
Free service/DIY
Paid Standalone Service
Not sure
Q324AA
Half of Franchisees Use Reputation Monitoring
That’s Part of a Bundle
About one-half of franchisees that monitor customer comments report they use a
monitoring service that’s part of a larger bundle of paid online services.

18
LCM:Franchisees
Franchisees are Mobile-Oriented
 More than one half of franchisees are
currently using some form of mobile
advertising/marketing, which is over
indexed compared to the full LCM
sample.
 Many more are using text messaging
(22% vs. just 13% for the full LCM
sample).
 The same percentage are using
Twitter (22% for both the franchisee
respondents and the full LCM sample).
 A full 62.6% report using mobile
phones for payments, vs. 27.5% for
the full LCM sample).
Haven't
heard of
it, 12.1%
Heard of it;
Don't know
much, 16.3
%
Learned
about it;
Don't
use, 15.8%
Currently
Using, 54.7
%
Tried and
Stopped
, 1.1%
Do you use mobile
advertising?
Q600

19
LCM:Franchisees
Franchisees Like Loyalty Programs and Discount
Deals
 Nearly all franchisees report they track lead sources (either frequently or occasionally).
 75% use a formal tracking system yet less than half use vendor data to analyze leads.
 A third ran between four and nine discount deals (or “daily deals) in the last six months.
 Nearly two thirds report they are “extremely likely” or “very likely” to run a discount deal
in the next six months.
70.3%
16.5%
12.1%
1.1%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Currently have
Don't have, but likely to get
Don't have, and not likely
Not sure
Do you have a loyalty program?

20
LCM:Franchisees
Franchisees Rate In-Person and Selected Online
Leads as High Quality
34.1% 37.4% 40.7%
34.1% 28.6% 30.8% 28.6% 30.8% 27.5% 31.9%
23.1% 22.0%
38.5% 35.2% 26.4%
31.9%
36.3% 33.0% 35.2% 31.9%
31.9% 25.3%
30.8% 30.8%
0%
20%
40%
60%
80%
100%
72.6%
67.1% 66.0%
64.9% 63.8% 63.8%
62.7%
59.4%
57.2%
53.9% 52.8%
72.6%
Q205
Sample Size = 91
“In Person” leads are usually ranked as the highest quality by SMBs. In comparing online lead sources to “in
person” leads, franchisees rank leads from their websites (e.g. via a contact form) just as highly. Telephone
calls and several online lead sources are also ranked highly (“top two box” ratings).

21
LCM:Franchisees
Appendix: Methodology
LCM Wave 16
Survey
Overall
Sample Size
Number of
Franchisees/
Minimum
Annual Spend*
Average Annual
Spend*
Core 300 20 No Minimum ~$3,000
Plus Spenders 300 71 $25,000 ~$82,600
*Minimum annual spend on advertising/promotion media (i.e. not including spend on website or other permanent web
assets). Outliers excluded in calculating averages. Outliers defined as:
 Core: Spending more than $40,000 annually
 Plus Spenders: Spending over $500,000 annually
This document provides the results from our Local Commerce Monitor (LCM) Wave 16
Survey, conducted in Q3/2012. All the data presented is for respondents that replied
“Yes” to the firmographic question below. This was a total of 91 respondents, or 15.2% of
the full LCM sample of 600.
• “Is your specific business or company set up as a franchisee or licensee of a national
company?”
The data in this document is drawn from a combination of the LCM Core and Plus
Spenders samples. Sample characteristics:
Results based on 300 responses have a confidence interval of +/- 5.7% at the 95% confidence level. The confidence
interval is larger for those questions that were asked of just a subset of the full sample.

Copyright © 2013 BIA/Kelsey. All Rights Reserved.
This published material is for internal client use only. It may not be duplicated or distributed in any manner not permitted by contract.
Any unauthorized distribution could result in termination of the client relationship, fines and other civil or criminal penalties under
federal law. BIA/Kelsey disclaims all warranties regarding the accuracy of the information herein and similarly disclaims any liability for
direct, indirect or consequential damages that may result from the use or interpretation of this information.
Questions and Comments:
Stephen Marshall
BIA/Kelsey
Research Director
smarshall@biakelsey.com
www.biakelsey.com

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