Two sentences from the same meeting.
Corporate: “We spent nine months building this campaign and half the system won’t run it.”
The franchisee: “I’m paying 2% of gross into a fund and my phone didn’t ring once this month because of it.”
Both of those are true. That’s the part nobody wants to sit with, because if only one side were wrong you could fix it by replacing a person. Neither side is wrong. The structure produces the fight, and it will produce it again next quarter with different people in the chairs.
The dollar is being asked to do two incompatible jobs
Corporate is buying something that pays off over three to five years. Brand recall, category association, the reason a stranger in a new city picks the sign they recognize. That work is genuinely valuable and genuinely unmeasurable in any window shorter than a year.
The operator has payroll on Friday and a lease that doesn’t care about brand recall. They’re buying calls this week, in about a ten mile radius, for the three services that are actually profitable at their location.
Those are different products. Putting them in one fund and calling it marketing doesn’t merge them, it just means one of the two gets quietly underfunded while everybody argues about creative.
And the sums are real. A typical structure runs 1% to 3% of gross revenue into a national fund, often with another 1% into a regional co-op. For a location doing $1 million, that’s $20,000 a year into national and $10,000 into the co-op before the operator spends a cent on anything they chose.
Why the fund becomes “a tax” in the operator’s head
Here’s the mechanism, and it’s psychological before it’s financial.
An operator who cannot trace any part of the national fund to their own front door stops thinking of it as marketing they own a share of. It becomes a line item extracted from them, in the same mental category as the royalty. Once that flip happens, every corporate campaign gets evaluated as “what did this cost me”, and compliance drops for reasons that have nothing to do with the creative being good or bad.
The flip is preventable, and the prevention is unglamorous: publish where the money went. Spend by category, what ran, what it produced, quarterly, in a format an operator can read in four minutes.
Systems that don’t do this eventually find out the hard way. In April 2026 the North Carolina Business Court let breach of contract claims proceed in PJC Management Group v. MAACO Franchisor SPV, brought by franchisees operating close to fifty locations, who alleged that marketing fees had been used for purposes unrelated to advertising and that required annual statements of receipts and disbursements were not provided for years. Those are allegations that survived a motion to dismiss, not findings, and the case dealt with one system’s contracts. But the shape of it is the point. An opacity problem became a litigation problem, and it took years of unanswered questions to get there.
If the only thing an operator knows about the ad fund is the amount debited, you have already lost the argument about what to spend it on.
The line I would draw
Not by channel type, and not by who is better at marketing. By how fast the value decays.
Corporate owns anything whose value compounds and is identical in every market. The brand and the positioning. The creative library, produced properly, with local customization built in rather than forbidden. The website platform, the location page template, the schema plumbing, the review platform, the CRM. National media where the system is big enough to earn it. And the measurement infrastructure, because a franchisee should not be building their own attribution.
The operator owns anything whose value decays inside a month and varies by zip code. Local search and local paid, with a real budget and real control. Promotional timing against what is happening in their market that week. Community sponsorships, the school team, the county fair. Review generation, which only ever happens when somebody at the counter asks. Hiring. Their own Google Business Profile, posts and photos included.
The dividing question for anything ambiguous: does this decision need to be made in the next seven days by somebody who knows this market? If yes, it belongs to the operator. If it can wait a quarter and the answer is the same in Tampa and Tacoma, it belongs to corporate.
That’s the same logic behind why one location ranks and the others don’t, and it usually comes back to who at that site is allowed to act.
The part corporate will hate
Real latitude means some operators will make ads you find embarrassing.
You’ll see a Facebook post with three fonts on it. Somebody will run a discount that undercuts a neighboring franchisee. A local radio spot will use a tagline retired in 2023.
Guardrails are fair: logo usage, claims, pricing floors, no bidding on the brand term against your own system. Beyond that, the cost of a bad local ad is smaller than the cost of an operator who has stopped participating entirely. A disengaged franchisee doesn’t just skip the campaign, they stop asking for reviews, stop updating their listing, stop answering the phone the way the brand standard says, and every one of those costs more than the ugly Facebook post.
I’ve watched systems spend more effort policing local creative than they spent producing assets those operators would actually want to run. Making the approved version easier than the homemade version beats approval workflows every time.
The part franchisees will hate
You don’t get to rewrite the brand because you have a theory about it.
The asset library exists precisely so you don’t have to be a marketer, and the operators who complain loudest about corporate creative are frequently the ones who never opened the portal. Before you argue for more control, check whether you have spent the local budget you already have, and whether you know what it actually costs to compete in your market before declaring the national fund useless.
And if you want the fund to spend differently, the version of that argument that works is a number from your own P&L, not a complaint about the TV spot.
Where I come out
Most franchise marketing problems are governance problems wearing a media budget.
The systems that do this well are not the ones with better campaigns. They’re the ones where the split is written down, the fund reports quarterly without being asked, and the operator has enough control over local spend to feel like an owner rather than a payer.
If you’re on the corporate side, publish the quarterly fund report before the next franchise advisory council meeting, whether or not anybody asked. It changes the temperature of the conversation more than anything you could put in the campaign.
My notes on what I work on cover the rest. If you’d like to think through your own split, drop me a line on email, WhatsApp or LinkedIn and we can have a quick chat. I’m contracted full time so this isn’t a pitch.