cause and effect

Linking a National Franchiser to a Charity Can Both Unify an Organization and Help Businesses Stand Out in Their Local Markets

By Colleen Debaise

Originally published in The Wall Street Journal April 30, 2007

Many franchisers are adding a new ingredient to the formula they give independent operators: a charitable cause. The tactic, known as “cause marketing,” isn’t new to large companies such as American Express Co., General Mills Inc. and Home Depot Inc., which for years have linked themselves to special charities or social causes and raised funds through promotions or merchandise sales. One of the more visible recent examples was Nike Inc.’s pairing with the Lance Armstrong Foundation to sell yellow “LiveStrong” wristbands, which raised money for cancer research and created a brief, yet memorable, international fashion statement.

Now, many franchisers are picking a cause at the national level — think breast cancer or needy children or world hunger — in an effort to unite franchisees in various markets, convey a consistent image, and boost their profiles and bottom lines. The technique is being used to help franchisees make a splash in the communities where they are based, sometimes even before they open.

“It’s increasingly popular among franchise organizations who are trying to penetrate local markets, who are trying to bond with their franchisees and who are trying to help franchisees to attract and retain employees,” says David Hessekiel, president of Cause Marketing Forum Inc., a Rye, N.Y., firm that connects businesses and nonprofits.

Connecting With Customers

Companies in general have begun spending more on cause-marketing campaigns and sponsorships of nonprofits, according to IEG LLC, a Chicago firm that promotes the marketing technique. Spending on such efforts rose to $1.34 billion in 2006 from $120 million in 1990, the firm says. “It makes a lot of sense for companies, including franchises, to use a sponsorship,” says William Chipps, senior editor at IEG. “It gives them a marketing platform and opportunity to connect with issues their customers connect with.”

In August, Contours Express, a women’s fitness company based in Nicholasville, Ky., announced a partnership with the Breast Cancer Research Foundation to host fund-raising events, usually at the chain’s gyms. “It was a logical fit because our clientele is women, and this charity certainly resonates with women,” says Eddie Leonard, director of marketing at Contours.

Under the partnership, Contours encourages its 400 franchisees around the U.S. to host fund-raisers based on the same theme, or held on the same day. A majority of the gyms, which are located primarily on the East Coast, took part in a “Bunco for Breast Cancer” fund-raiser in September and a “10-5 To Save Lives” fund-raiser on Oct. 5, in which gym members gathered pledges based on their participation in a 29-minute workout and donated the proceeds to the cause.

“We didn’t know what to expect,” Mr. Leonard says. “We thought we’d raise $10,000.” Instead, the various gyms and their members raised more than $46,000, which Contours’ corporate office matched dollar-for-dollar. While Contours initially thought of the partnership as simply philanthropic, “it certainly does have the potential to not only do good but trickle down to all our franchisees and give them a community feel to their marketing,” he says.

Attracting Franchisees

Making inroads in the local community is why Rapid Refill Ink, a Chanhassen, Minn., franchiser that refills ink and toner cartridges, assigned a social issue — environmentalism — to its independent operators in 85 locations. “We tell the franchisees: Here’s a marvelous opportunity to get involved,” says Steve Hockett, Rapid Refill’s president.

Rapid Refill’s franchisees receive large cardboard bins emblazoned with the Rapid Refill name that can be placed in offices at schools, churches and charitable organizations for the collection of used ink and toner cartridges. Rapid Refill, which promises to pay as much as $3 for each used cartridge collected, picks up empties weekly and sends out checks monthly. The stores can resell the cartridges, and the nonprofits can use the money on any programs they see fit.

Some franchisees place recycling bins in the community before they open their doors, Mr. Hockett says. “It allows us to generate awareness of who we are, even before we open,” he says.

Some franchisees say the cause is what drew them to the chain in the first place. Jack Plomgren of Norfolk, Va., who had spent much of his career had spent much of his career in the recycled-paper industry, decided last year to open a Rapid Refill store because of the company’s eco-friendly bent.

“I was attracted to the whole idea of recycling cartridges and being involved with environmental causes,” says Mr. Plomgren, who has placed about 30 collection bins around Norfolk. He also gave out hundreds of dogwood, redbud and other trees to customers for Earth Day, April 22, and his store works with “Keep Norfolk Beautiful,” a community-improvement group, to encourage residents to recycle old electronics equipment. He says Rapid Refill’s green marketing appeals to his customers, who mostly live in Norfolk’s Ghent historic district and tend to be environmentally conscious.

Consumer Impetus

“Consumers are more skeptical and cynical today than in the past,” says Alison DaSilva, vice president at Cone Inc., a Boston marketing and media firm that advises clients on cause marketing. In recent years, she says, “they’ve seen a national tragedy on our soil; they’ve seen corporate executives being prosecuted.” As a result, she adds, more customers are demanding social responsibility.

Some franchises are trying to come up with innovative ways to support a cause. Since 1991, Express Personnel Services, a franchiser with nearly 600 offices, has raised more than $3 million for the Children’s Miracle Network, the charity benefiting sick and injured children founded by the Osmond family.

The company says it has thrown events from chili cook-offs to bowling tournaments to encourage donations, but its guaranteed moneymakers are the company’s hitch of rare black-and-white Canadian Clydesdales. The horses — which weigh about 2,000 pounds each — show up at parades, rodeos, fairs and children’s hospitals. People can bid on rides in a horse-drawn wagon or make a donation to have their pictures taken with the horses, says Linda Haneborg, senior vice president of marketing.

The company says it chose Children’s Miracle Network because the charity’s mission resonated with employees of its franchisees, many of whom are single parents. Why did it choose the horses? The animals are distinctive and great with kids, Ms. Haneborg says. “They’re our goodwill ambassadors,” she says.