FINAL Franchise & Social Media Research Paper by Thomas Kovoor

7/31/2019 FINAL Franchise & Social Media Research Paper by Thomas Kovoor

1/13

Should RestaurantFranchises UseSocial Media:Facebook?A Guide for Franchisees

Using Social Media

Authored by: Thomas Kovoor

Spring 2012

INTERACTIVE COMMUNICATIONS ENTERPRISES


2/13

Should Restaurant Franchises Use

Social Media: Facebook?

This guide is intended to provide strategies for social media practices with Facebook for public orprivate national franchises managing local franchises as well as local franchises interested inutilizing social media as a marketing strategy. The purpose of the report will be to identify thevalidity of using social media and highlight several approaches to marketing through theseplatforms. In addition, the report provides recommendations based on qualitative and quantitativeresearch of both local and national Facebook pages.

Executive Summary

National and local franchises need to re-evaluate their marketing strategy specifically for

Facebook to drive their business. In this report, social media is evaluated as a viable strategy forfranchises, the theory of distributed capitalism is explained to support the mutation of traditionalmarketing into social media, the use of national and local Facebook pages are analyzed, andrecommendations for implementing a local franchise page are explained.

Our research recommends that local franchises create an engaged local Facebook page if theyhave support from the national franchise. As digital economics rise, the use of technology in thebusiness world is ever present. Therefore, as traditional marketing mutates into a new approachthrough use of social media, we can engage our consumers by creating a platform forconversation and sharing ideas with a consumer-centric mindset.

This is not to say the bipartite strategy is without potential hazards. Empowering local franchisesto represent the national brand presents a serious risk of incoherent marketing strategies whichcould result in dilution of the brand. Successful implementation can only occur through thoroughdue diligence and careful monitoring.

Despite the risks, the benefits of creating a customer-centric experience and engaging thecustomer at the local level will improve brand loyalty and profitability for the local franchise. As aresult, the national franchise will benefit


3/13

Why is social media a viable market strategy

for national restaurant franchises?

The franchise industry has largelybeen successful by its defineduniformity and consistency. With the

rise of social media, the traditionalways of marketing are being stirredup. Social media platforms arequickly becoming an important part offranchise companies marketingstrategies, especially in a time oflower marketing budgets, says AlisaHarrison, vice president,communications and marketing at theInternational Franchise Association.1

Since 80% of restaurant operatorsnow identify social media as a

marketing tool, there are 20% ofrestaurant operators that need toconsider adjusting their strategy asinternet use and social media risesacross all demographics.

The Pew Research Center for Internet& American Lifes Project hasdeveloped quantitative research oninternet use showing the following:

80% of all adults are online(81% men, 79% women)

94% of adults aged 18-29 areonline

88% of adults aged 30-49 areonline (Internet UserDemographics, 2012)

64% of adult users use anonline social networking site(Trend Data, 2012)

43% of adult users use anonline social networking sitedaily (What Internet User DoOn A Typical Day, 2012)

Figure 1: The market potential of FacebookSource: Infographics Lab

As you can see in the Facebook infographic to the right, it demonstrates the large populationactively using Facebook as well as highlight data showing the widespread reach across the world.These represent potential consumers for advertising purposes.


4/13

There continues to be a rise of social media usage over time. Not only is it evident from the graph

of Daily Activities that both internet usage and social media usage are increasing, but it can beseen that the increase from 2008-2009 for social media usage is greater than that of the net gainin internet users in that time period. This shows that not only new users to the internet are joiningsocial media sites, but that people who used the internet in previous years are becoming moreactive in social media as well. This demonstrates how Facebook is a viable option for a franchisedue to the number of users, likes, etc. and a primary platform for franchises to engage with thecustomer in the short term and in the future.

According to a recent study released by Aberdeen Group, 63 percent of companies plan toincrease their social media marketing budgets in 2009, despite the poor state of the economy.Gini Dietrich, CEO of Arment Dietrich expressed that Ninety-three percent of Americans expectcompanies to have a social media presence and are using social media to participate inconversations, engage with brands, and findjob opportunities.

Furthermore, the following data collected from Franchiseknowhow explains that not only is socialmedia growing in general, but also has shown a significant response from various restaurantfranchises.

o 80% of restaurant operators say they now see social media as a marketing toolo 17% plan to increase social budget from 2010-2011; social media tied with

display media as largest budget areas of growth (Texeira, 2011)

These notions are supported by a theory of digital economics. As we advance, there is a strongbelief that the post-industrial world economy will fundamentally rely on advanced technology. AsShoshana Zuboff wrote in Creating Value in the Age of Distributed Capitalism, the consumptionshift in Fords time was from the elite to the masses; today, we are moving from an era of mass

consumption to one focused on the individual. (Zuboff, 3) Mass consumption still exists, but asindividual needs and wants are prioritized, we notice a high degree of customization for consumerproducts. Franchises like Chipotle and Burger King allow consumers to customize their meal to fittheir individual preferences, rather than taking a one-size-fits-all approach. In a way, there is atransition from the masses to the individuals but now we have to consider how technology iscreating an impact.

In marketing, there has been a similar shift from mass consumer focus to an individual consumer-centric model. We can observe this through the shift in use of social media over traditional


5/13

marketing. Social media allows enterprises to create public yet individual conversations betweenthe consumer and the business through direct interaction on sites like Facebook and Twitter.This allows the company to put on a human face and relate directly to individual customers;other customers who witness this are more likely to conduct business with the company even ifthey are not directly involved in these conversations. In addition, social media offers enterprisesthe opportunity to target consumers at the individual level based on their actual interests whichthey publish on the site rather than their suspected interests based on the subject matter of aparticular show on television. We see this practice in both Googles AdSense and Facebooks ad -delivery system.

Merriam Webster defines a mutation as an alteration or change, as in nature, form, or quality.As new marketing techniques evolve, social media can be seen as a mutation of traditionalmarketing. Zuboff identifies the differences between mutation and innovation. Innovation intechnology improves the framework in how goods and service are delivered whereas mutationcreates new frameworks and new approaches to how to deliver goods and services. (Zuboff, 3)Social media exemplifies a major mutation from traditional marketing where Facebook can beused to target ads at consumers with individual interests.

This mutation enables us to develop a different and better approach to business. As we can see

through Amazon.com, Apple, eBay, and YouTube, there is a shift from products and services totools and relationships enabled by interactive technologies. (Zuboff, 3)

The main takeaways are that successful mutations like that of traditional marketing to socialmedia exemplify new sources of value that the internet can bring to consumers. In a sense, itstrengthens the sense of personal control, delivers opportunities for voicing ideas, and enablesfreely chosen social connections. This defines social media. Through the emerging understandingof the benefits of distributed capitalism, businesses with a consumer-centric focus have theirconsumers interest in mind rather than their own internal interest. In a society that transitionstowards individual needs and customization, the mutation of traditional marketing into socialmedia delineates how successful social media with in an era focused maximizing the experienceof the end user. Social media is one of the best mutations that we can take advantage of asbusiness owners. Overall, we can see the massive audience that social media appeals to and

the potential that it has to simultaneously reach this large audience as well as create a moreinteractive and personal experience for each consumer.Comparing National and Local Franchise

Social Media Practices

There are several key differences between the national Facebook page for Buffalo Wild Wingsand their places page for the Oxford, OH location. The national page can be characterized by amuch wider following of people, but this can be somewhat discounted because a national pagewould appeal to a national audience while a local page would only appeal to a local one. One ofthe distinguishing characteristics of this page is that there are many more posts by Buffalo WildWings itself, and they are more prone to use company slogans. Of the few posts by patrons, the

majority of posts are recommendations, but they tend to get lost in all of the posts that thecompany makes. One major drawback of the national page is that they are unable to advertisespecial events or specials that may only be occurring at one or a few locations.


6/13

The local Facebook page on the other hand is listed as a placeas opposed to the groupcategory and is followed by fewer people. Even though it is followed by fewer people, the patronshave a much more active scene on the front page of the page, with various reviews andcomments being prevalent. The local franchises usually post reminders of local events as well asshowcase their manager, employees, and other events. This page is far less developed than thenational page, but the corporate management encouraging local franchises to better their pagecould quickly resolve this. Another main difference between the two pages is that the local pagehas a much greater feeling of community involvement, and is much more likely to have morecomments such as Thank you for making me feel so welcome than the national page .

Analytics behind Buffalo Wild Wings

Source: Wildfire Social Media Marketing

This graph demonstrates several key aspects of social media utilized by both the local andnational Buffalo Wild Wings. The most evident finding is that significantly more people like thenational page as opposed to the local page. However, if one considers that there are over 800franchises throughout the United States, then that averages a total of 8972 likes per franchise onthe national page (Buffalo Wild Wings, 2012). Although this may seem significantly higher thanthe Oxford, OH location, one must also consider that Oxford has a much smaller population than

many of the larger cities that have a lower number of Buffalo Wild Wings per capita. The 2,110likes that the Oxford, OH constitute roughly 10% of the total population of Oxford, OH, and thatpercentage is growing at a higher rate than the national organization. This Facebook page wasalso created several years after the Buffalo Wild Wings main page was created. When these factsare considered, it becomes evident that focusing efforts on local Facebook pages for eachfranchise would impact a significant portion of the community in which that franchise exists.Another benefit that this approach provides is that it allows other local businesses to like the pagewhich builds a vast network in the community.

Buffalo Wild Wings was used as the example because it had the most developed local page


7/13

available out of several restaurants in the Oxford, OH area. Several other restaurants had sitesas well (e.g., Taco Bell and Jimmy Johns) but there was little to no information on the sites, andthey were extremely underdeveloped, which may demonstrate the need for the franchisor to pushat a corporate level for individual franchisees to develop and maintain a Facebook place page.Conversely, it may identify the restraints national franchises put on local franchisees decisionstowards social media.

There are multiple reasons franchisors control social media under the

franchise brand which include:

Allows for a consistent and single message to be communicated from one source, thefranchisor.

Reduce social media ability to disperse negative news rapidly.

Monitor and respond to customer feedback on an as needed basis with the rightresponse.

Develop a franchisor media crisis plan to respond to serious threats.

Concern that some franchisees may not effectively monitor their individual sitesespecially as pertains to negative customer feedback.

Control the impact that terminated franchisees who feel disenfranchised have on thenational franchise (Texeira, 2011)

In addition, there are several of state and federal laws that apply to social

media campaigns. Issues to consider are the following:

Using false advertising and defamation

Using other companys trademarks and copyrighted materials in social media postsusing logos and copy without permission can give rise to infringement claims

Using social media to screen employees and prospects, under certain circumstances,can give rise to privacy violations

Using internal social media policies to restrict employees use of these platforms, if doneimproperly, can create legal liabilities

Using social media can be a threat to maintaining proprietary rights in confidentialinformation that is negligently disclosed (Fabian, 2011)

There are necessary risks and precautions to take when implementing social media at the locallevel. First, it is important to understand the terms of contract and the restrictions of social media.In Franchise Directs article on How Does Your Franchise Use Facebook?, one major concern isthe lack of a coherent Facebook strategy. Carpenter, founder of Wild Birds Unlimited Inc.,expressed his concerns stating that If you have no policy, [franchisees] will do whatever theythink they should do. As with everything in franchising, a national vision and local mentality mustgo hand in hand when launching a Facebook page.


8/13

Recommendation

There has been an extreme push towardsdeveloping social media platforms togrow a business but few understandingthe functionality of social media platforms

like Facebook and how it interacts withconsumers to expand product and brandrecognition, drive sales and profitability,and engender loyalty.(Mckinsey,Demystifying Social Media)

A local franchise operates under theumbrella of a national office. The national franchise provides support and strategy for localfranchises to succeed. In certain franchises, there may be restrictions in how local franchisespractice social media. From our research, we realize that local franchises should utilize create alocal Facebook page if managed properly and supported by the national franchise.

A Facebook page can be very useful to centralize pertinent information for consumers including a

restaurants menu, hours, local events, etc. In addition, it is a cost effective way to engageconsumers and initiate a customer-centric conversation to grow your sales/ profitability. But,remember there are proper ways to manage a Facebook page.

Your company website serves as a tool to distribute content and awareness. Adding social mediais beneficial because it adds a new channel to distribute content, links, articles to spread to otherpotential customers. In addition, once a business develops a loyal customer, they can expect tobe able to distribute content directly to those who are interested which allows a more tailored formof marketing generating more directly targeted sales. This is the main reason why social medianeeds to be implemented.

There is a right and wrong way to socialmedia marketing. For instance, you dontinvite people over to watch a sports gameand then do a sales presentation.Successful businesses focus on developingtrust to generate faithful and loyalcustomers. Instead of using forceful salestactics, businesses should offer theirprofessional advice to customers problemsin a friendly way. To the right, David Steelefrom the Steel Method outlines major dosand donts of social media marketing.


9/13

Implementation of an engaged Facebook pageThere are two main reasons to create an engaged Facebook page: 1) to take advantage of loyalconsumers and 2) to not disinterest consumers.

There are multiple reasons consumers become less engaged over time. Refer to the figurebelow.

Source: Wildfire Social Media Marketing

Above are examples of things not to do. Instead, to increase engagement,you should do the following suggested by Wild Fire Social Media

Marketing:

1. Go beyond the newsfeedIntegrate applications that encourage activity from users such as Wildfire Page Manager.This will allow fans a more dynamic experience on your page reducing the likelihood of afan feeling that the page is static.

2. Create social sharingIncorporate items that are easily are easily shareable. It is known that 18% of usersbecome a fan to show others that they support brand. Therefore, it is important toprovide items such as videos, jokes, pictures, etc. about your company.

3. Create brand affinityDevelop strong relationships that establish exclusive access. It is known that 8% ofusers become of a fan to know information first and 6% of users become a fan to gainaccess to exclusive content (eMarketer).

4. Use the wall for nurturing fans over timeFacebook should be used to create a customer-centric conversation. Initiate, engage,and continue to address the needs and wants of consumers to raise their interest andawareness of what is going on in your business. (Mind the Statistics, 2012)


10/13

Through expert interviews, McKinsey was able to identify how to continuously improve andmonitor how social media affects your consumer. There are 10 major touch-points throughout theconsumer decision journey that are broken into four major subcategories.

Exhibit 1 shows how many different places along the consumer journey there are to track andalter social medias effectiveness. As you implement an engaged Facebook page, make sure youmonitor what consumers are saying to understand consumer trends. Furthermore, continue torespond to consumers comments, amplify the brand by providing recommendations, fosteringsocial sharing and brand advocacy, and lead changes in behavior by raising brand contentawareness, product launches, targeted deals, and altering from customer input.


11/13

Conclusion

It is apparent that national and local franchises need to implement engaged Facebook pages.The trend of social media in the franchising industry is drastically rising with only 20% offranchises not using social media. In addition, in recent years, there has been a large increaseacross all demographics of internet and social networking use. During this time, Facebook has

risen to a population of over 845 million monthly active users and over 100 bil lion connections.This shows how much activity and potential market there is in social media for businesses.

As digital economics rise, traditional marketing mutates into a new approach through use of socialmedia in which we can engage our consumers by creating a platform for conversation andsharing ideas with a consumer-centric mindset.

After analyzing the national and local Facebook pages of Buffalo Wild Wings, we can identify howthe customer interaction on the local page seems me interactive and personal compared to themore informational experience on the national page. Through the Wild Fire Facebook likescomparison, we can see that the national page has more likes compared to the local page,7,178,061 and 2,110 likes, respectively but by considering per population that Oxford, OH isgrowing at a higher rate than the national organization.

There are necessary risks and precautions to take when entering social media but overall, theindustry trend is moving towards this cost effective and efficient form of advertising. Therefore, asa franchisor, we recommend implementing a local Facebook page if the page is supported by thenational franchise.

As you embark into the world of social media marketing to engage your local community,remember how important it is to track the effectiveness of your time and employees timeinvestment and continuously improve on engaging consumers in an on-going conversation tomanage your local page and its brand in a proper mannerand grow your sales throughconsumer engagement and loyalty.

With this in mind, there are endless benefits to be expected from entering the social media realm.


12/13

References

Buffalo Wild Wings. (n.d.). Buffalo Wild Wings. Retrieved March 30, 2012, from

www.facebook.com/BuffaloWildWings

Buffalo Wild Wings - National and Local - Oxford, OH. (n.d.). Comparison of Buffalo Wild Wings. Retrieved

April 19, 2012, from

https://monitor.wildfireapp.com/comparisons/376295/fans_followers/buffalo-wild-wings-vs-

buffalo-wild-wings-oxford-oh-on-facebook#&data=cumulative&range=all

Buffalo Wild Wings Oxford, OH. (n.d.). Buffalo Wild Wings Oxford, OH. Retrieved March 29, 2012, from

www.facebook.com/pages/Buffalo-Wild-Wings-Oxford-OH/106923702849?ref=ts

Daily Internet Activities, 2000-2009 | Pew Research Center's Internet & American Life Project. (2009,

January 1). Pew Research Center's Internet & American Life Project. Retrieved April 26, 2012,

from http://www.pewinternet.org/Static-Pages/Trend-Data/Daily-Internet-Activities-

20002009.aspx

Demographics of Internet Users. (2012, January 20). Who's Online: Internet User Demographics. Retrieved

March 28, 2012, from =http://www.pewinternet.org/Static-Pages/Trend-Data/Whos-

Online.aspx

Divol, R., Edelman, D., & Sarrazin, H. (n.d.). Demystifying social media - McKinsey Quarterly - Marketing &

Sales - Digital Marketing.Articles by McKinsey Quarterly: Online business journal of McKinsey &

Company. Business Management Strategy - Corporate Strategy - Global Business Strategy.

Retrieved April 23, 2012, from

http://www.mckinseyquarterly.com/Demystifying_social_media_2958

Fabian, J. (n.d.). Social Media Tips for Franchisors and Franchisees (from a Franchise Lawyer) Franchise

Cost & Opportunities | Franchise Help. Franchise Opportunities - Buying a Franchise, Business

Opportunities | Franchise Help. Retrieved April 12, 2012, from

http://www.franchisehelp.com/blog/social-media-tips-for-franchisors-and-franchisees-from-a-

franchise-lawyer

Fabian, J. (2011, September 14). Social Media Tips for Franchisors and Franchisees (from a Franchise

Lawyer) Franchise Cost & Opportunities | Franchise Help. Franchise Opportunities - Buying a

Franchise, Business Opportunities | Franchise Help. Retrieved April 22, 2012, from

http://www.franchisehelp.com/blog/social-media-tips-for-franchisors-and-franchisees-from-a-

franchise-lawyer

Lawrence, S. (n.d.). How Social Media Is Changing Franchising | Franchises from SF_Gate. Business Advice

Business solutions from SF_Gate. Retrieved April 26, 2012, from http://allbusiness.sfgate.com/food-

beverage/restaurants-food-service-restaurants-fast/12357153-1.html

Mind the Statistics: Creating Engaging Fan Pages for your Brand on Facebook | Wildfire Social Media


13/13

Marketing Blog. (n.d.). Wildfire Social Media Marketing Blog. Retrieved April 23, 2012, from

http://blog.wildfireapp.com/2011/08/15/mind-the-statistics-creating-engaging-fan-pages-for-

your-brand-on-facebook/

Mutation - Definition and More from the Free Merriam-Webster Dictionary. (n.d.). Dictionary and

Thesaurus - Merriam-Webster Online. Retrieved April 22, 2012, from http://www.merriam-

webster.com/dictionary/mutation

Teixeira, E. (2011, January 1). Social Media and Franchising. Franchise advice and business information for

franchisees and franchisors from Franchise Know-How. Retrieved March 21, 2012, from

http://www.franchiseknowhow.com/marketing/social.htm

Trend Data. (2012, February 1). PEW Internet & American Life Project. Retrieved February 29, 2012, from

http://www.pewinternet.org/Static-Pages/Trend-Data/Online-Activites-Total.aspx

What Internet Users Do On A Typical Day | Pew Research Center's Internet & American Life Project.

(2012, February 1). Pew Research Center's Internet & American Life Project. Retrieved April 26,

2012, from http://www.pewinternet.org/Static-Pages/Trend-Data/Online-Activities-Daily.aspx

Zuboff, S. (2010, September). Creating value in the age of distributed capitalism. McKinsey Quarterly. 1-

13.

FINAL Franchise & Social Media Research Paper by Thomas Kovoor

Documents