Just so you’ll completely understand where I’m coming from, I’m going to give you a real life example of this…
A few years ago, I wasn’t an independent. (Franchise consultant-broker) I was another cog in the wheel. That was enjoyable.
Anyway, my late father, Jerry Libava, joined this national franchise brokerage group (The Wheel) after a successful stint as a franchise development director for a major health-related franchisor. (This was in 1992)
My Dad felt that by being part of a “group,” he would be able to better leverage his chances for success as a franchise consultant-broker. (This was a new adventure for him. He was the victim of a corporate downsizing. Basically, the industry he was in faced some heat from the FTC.)
Anyway, he joined this group, and convinced me to do the same, in 2001, after I, too, was downsized. (Fired)
As I got my feet wet in franchise consulting, I started to become active in some of the marketing decisions that were being made by the head of the group.
Let me digress for a moment. This “group” was actually a franchise, and I was a franchisee. (You see, when monthly marketing fees are collected, and royalties are paid, it’s a franchise.)
The head of the group was able to get away with not registering it as a franchise for a long time. Finally, when he sold it, it magically became a franchise.
Enough of that nonsense. Here’s what I learned; I wasn’t a good franchisee. I generally don’t follow rules. Let me re-phrase that; I follow rules most of the time, except when they’re asinine. In the case of this group franchise, there were lot’s of them!
I argued vehemently about some of the really poor marketing initiatives that were taking place. They were affecting my livelihood. Marketing in this case was meant to do one thing; Get us leads. Get our phones ringing with interested franchise candidates. Get our email boxes humming! It wasn’t! But our main competitor was doing one heck of a job at it!
This guy was somehow able to position himself as “The Franchise Expert” on a couple major entrepreneurial websites. (They shall remain nameless)
Scratch that. I’ll name one;
www.Franchise.org (That’s the International Franchise Association’s website)
The other one was a website that was extremely popular with would-be entrepreneurs at the time. (Still is, actually)
Anyway, this competitor did a fine job of securing spots on both of these sites as “The Franchise Expert.” He did a lot of Q & A type of stuff with prospective franchise owners on both sites, and was even extending his reach into the print versions of these sites.
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I wanted our group to compete with him. The powers that be decided that it “would be too expensive to do this type of ‘expert stuff.’ ” Wait! Slow down! Too expe…“you mean this competitor was paying to be “The Franchise Expert” in these places? Do the prospective franchise owners who are getting their important questions answered by this guy know this? Do they know that this is a paid advertising placement?” (I exclaimed)
Now, do you see where I’m going with this? This guy was paying to be the expert, and the folks that he was providing answers to just thought that they were getting a fabulous free Q & A service from the magazines and the websites that this guy was on. It was never disclosed that he paid to be the expert!
Well, our group’s head wheel’s never did agree that we should pony up with our money to do something similar, so the guy continued to be the expert for a year or two. Smart guy. Kicked our butt. (It gave me one more reason to leave the group, and become independent)
What is your feeling about this? Does this matter? Should websites and blogs disclose their advertising realtionships more clearly?
I think the FTC recently said something about this.
