Brands offer co-op advertising funds to franchisees because it helps them reach local audiences and boosts the brand’s local appeal. Most national advertising by brands focuses on the “what and why” of the product messaging, but local marketing and advertising by franchisees helps consumers understand the “where.”

A new survey found that 30% of franchisees get over half of their advertising spend from co-op funds. Overall, 65% of franchisees surveyed use co-op programs to varying degrees for advertising and promotion.

Of those that take advantage of co-op programs, about 40% said co-op contributes 25-49% of their total ad spend. Another third said co-op only contributes to 25% of their budget or less. Clearly co-op is a mixed bag as it relates to actual usage, but based on LSA estimates, billions in co-op advertising dollars are left on the table each year