How Much Should I Spend On A Franchise Marketing Agency?

How Much Should I Spend On A Franchise Marketing Agency

How Much Should I Spend On A Franchise Marketing Agency

Trying to answer the question “How Much Should I Spend On A Franchise Marketing Agency?” is not easy to do without a full understanding of the franchising industry, more particularly the franchise development marketing industry.

We get phone calls all the time from people that have spent like $10,000 / mo. with various agencies on Google and Meta ads only to find out 12 months down the road that none of those leads actually converted into a sale.  At least with franchise broker networks, you’re not out more than $10,000-$20,000 with any given broker network, as they make most of their money off of sales commissions.  With agencies, they make nothing off of franchise sales, so if you overspend or have bad targeting, you can lose well over $100,000 without netting any sales if you work with the wrong franchise marketing agency.

To answer the question “How Much Should I Spend On A Franchise Marketing Agency?”, there are really 2 components:

  1. Ad Spend
  2. Management Fee

Let’s talk about each.

Our main focus here at Lead PPC is franchise leads and franchise lead generation.


Ad Spend

When you are first starting, it’s best to start with an ad budget of around $1,500 / mo. if you are new to selling franchises via online leads.  We’d recommend spending about $900 / mo. on Google and $600 / mo. on Facebook initially.

If you are working with an FSO (Franchise Sales Organization) like REP’M or Rain Tree, then you may want to increase that initial ad budget amount to around $2,500-$4,000 / mo.  This is because you’re already paying quite a bit of money to engage the sales services of the FSO, and they are used to having a lot of leads.

Once you have closed your first couple of deals, then we would recommend that you gradually increase your ad budget.  You usually don’t need to spend more than around $5,000-$10,000 / mo. ever on franchise development lead generation.  However, we do have some large clients that will spend between $40,000-$75,000 / mo. on their ads.

It’s our recommendation that once you are in that $5,000-$10,000 / mo. range in ad budget you’re better off hiring 2-3 Franchise Broker Networks like Franserve and IFPG to diversify your lead sources so that you aren’t solely dependent upon online advertising to drive all of your deals.

Keep in mind that it usually costs about $7,000-$12,000 to generate a franchise sale via PPC ads.  This is about 1/2 to 1/3 the price of generating a sale via a Franchise Broker Network (which usually costs around $22,000-$40,000 per sale).


Management Fee

On the management fee side of things, you should expect to pay somewhere between $750-$1,250 / mo. on your management fee.  However, if you’re spending over $10,000 / mo. on your ads, it’s probably closer to around $1,000 / mo. + 10% of your ad spend.

Avoid working with agencies that are under around $750 / mo. as they probably don’t understand the industry (very few agencies specialize in franchise advertising).  Also, avoid working with agencies that charge more than around $1,500 / mo. for their management fee.  They also probably don’t know the industry and you’ll be spending a lot of your money trying to teach them.



Need Help?

If you would like to speak with us about potentially having us help drive quality franchise leads for your franchise please fill out our Contact Us form.

We are a boutique franchise marketing agency / franchise ad agency that specializes in franchise marketing and franchise advertising via PPC (Google Ads + Meta Ads).

Additionally, if you need help with franchise sales or with finding a solid franchise broker, we would be more than happy to share our opinions with you on the subject.  Thanks!