Turn your television on and for a single hour, jot down the commercials you see on any of the major broadcast or cable channels (ABC, NBC, CBS, ESPN, CNN, etc.). On major channels, there are three main categories of advertisers. (Check the bottom of this post to find out what those three are.)
Though it cannot be proven, franchising advocates continuously quote that 40 to 50% of all retail is franchised. (The data is owned by too many people and influenced heavily by pro-franchisor predatory bigots.) When you analyze the data of your one hour’s worth of major network advertising, it will become apparent just what the three verticals are that spend the lion’s share of advertising dollars with Madison Avenue agencies.
But that’s not the question or the purpose of this post. The question is: Where is the money coming from? First of all, some history. McDonald’s ignored all conventional wisdom over three decades ago when they surpassed the 100 million dollar mark in advertising spend in a single year. Most could not fathom the thought of such. How did they justify it? Simple, it wasn’t their money! It is the money of hard working franchisees who pay exorbitant royalties to franchisors who spend it freely and with reckless abandon. McDonald’s practices are truthfully depicted in in Fast Food Nation, author Eric Schlosser. They pioneered the principle of going after your children, the pester power method. But that again, is not the issue. The real issue is that many franchises are B2B and not B2C. Nearly all of the franchises that are offered at low entry fee are B2B. These predatory franchisors have no intention of doing anything with the hard-earned money they collect for advertising from your profits. When asked the question of where that money is spent, or better yet when reading an FDD or UFOC, it is up to the sole discretion of the franchisor whether or not those funds are even earmarked for advertising. Read an FDD and if you can even find the subject covered, you will see that the money can be used for advertising or any other thing the franchisor chooses. Many simply use if to fund their playboy lifestyles.
So the next time you see David Brandon bragging that he’s giving money back to Main Street, don’t believe it. He’s spending the money of the franchisees as though it is his. When you watch a Subway commercial, remember that Fred DeLuca is the slimiest franchisor in the world, fighting more lawsuits than McDonald’s, Dunkin Donuts and Pizza Hut combined. Fred gladly sells single franchises to unsuspecting immigrants (all they need is a pocket full of cash) when he couldn’t make it until he owned three!!! When you see a Quiznos (seedy and poorly thought-out million sub giveaway campaign), know that Rick Schaden and his staff of flunkies approved the campaign and then fired the VP of Marketing (who came from telecommunications – how ignorant and cheap is Schaden for even hiring her) as a scapegoat. (It’s only a matter of time until Quiznos loses the pricing game, thus driving all of their franchisees out of business. Freddy D. has 6 or 7 times the number of franchisees, thus a war chest of over 400 million dollars a year at his disposal (pun intended). Ricky hasn’t a chance of winning a price war.
So the next time you watch a Nascar race (if you can stand the fact they never learned to turn right;), count the number of advertisers who sponsor a car and then see how many are franchises. Then realize that Ricky and Freddy and Davey are all spending 4 to 5 MILLION per car to put their brand on the hood of a race car! That’s right, the hard-earned money of your relatives or friends or immigrants (who are unaware because they’re probably working 7 days a week just to make ends meet) is being spent so Ricky and Freddy and Davey can sit in the infield or in VIP boxes, get special privileges at the expense of those who labor just to scrape by.
The three vertical leaders in advertising are auto, beverage and food. (Yes, they are all franchised; GM not for long – they are soon to be owned by you and your Commander-in-Chief, who by the way, operates just like a franchisor. He spends your money and you have absolutely not one damn iota of say in any of those decisions!)
Bloody
Bloody Franchise 
Of course! In this hybrid business model that permits franchisors to grow CHAIN operations and profits (while greatly reducing risk and need for capital for hard assets) on the invisible chains of the standard franchise agreement, it is the franchisees who pay through the nose for advertising and special offers that don’t always help THEIR bottom lines.
In the Franchisors’ quest to grow or at least maintain market share and their EBITDA to continue to be attractive to new franchisees and to investors in their franchise paper, if applicable, the franchisees operating on thin or no profit margins are often NEGATIVELY impacted by advertised special offers that they, under contract, pay for but do not control.
But, Americans don’t understand that the BIG FRANCHISORS are big because they can “eat” and exploit their franchisees with immunity and impunity under the law and are not subject to TRUTH in ADVERTISING scrutiny when selling franchise opportunities to that portion of the public who are sucked into the franchise world as a means of “self employment.”
Of course, we should worry about the immigrants —–but what about the VETS and their family members who have been made the targets of franchisors since The Patriot Express Loan pilot program was implemented by the SBA in June of 2007 —-supposedly to “honor” the veterans??