Marketing is one of the biggest reasons many people buy a franchise, but it is also one of the areas most commonly misunderstood. Franchise Business explains that within a franchise network there are usually two distinct marketing elements: national marketing and local area marketing. It states that national marketing is the franchisor’s responsibility, while franchisees are responsible for their own local area marketing to engage with the local community and promote their own business.

That distinction matters because brand recognition alone is not enough. Franchise Business notes that a franchise needs more than a logo and a reputation, and that buyers should understand how the franchisor manages marketing when researching a franchise. In practice, that means looking at how the brand supports campaigns, approvals, assets, consistency and store-level promotion.

The ACCC also encourages prospective franchisees to ask detailed questions about marketing before they buy. Its guidance suggests asking how much will be paid in marketing fees, what happens to unspent money in the common marketing fund, whose salaries are paid from that fund, what the marketing strategy means for the business, and whether the franchisee is expected to commit time and money to local area marketing or seek franchisor approval.

Under the current code, these issues also overlap with the broader rules for specific purpose funds. The ACCC says a specific purpose fund includes what was formerly known as the marketing fund, and that unless the franchise agreement says otherwise, franchisees usually do not get a say in how the fund money is spent. The franchisor decides this, and the money does not have to be spent promoting each individual location.

The smartest franchise buyers do not just ask whether a brand has “good marketing.” They ask how marketing works, what they are paying for, what local responsibilities sit with them, and whether the system gives them the support needed to grow revenue in their own area.