Originally a way of identifying the ownership of cattle, it’s fair to say that branding has come a long way since the days of fiery pokers! However, its essence remains the same. The purpose of a brand is to distinguish the goods and services that a business provides from those provided by others.
A brand is not just a badge of origin (or trade mark), it is a reputation built up by a business. As branding expert, Seth Godin puts it:
“A brand is the set of expectations, memories, stories and relationships that, taken together, account for a consumer’s decision to choose one product or service over another.”
Why is a brand important in Franchising?
The brand of a business is fundamental to franchising. Growing the brand is a major reason for franchising a business. Similarly, buying into a proven Brand is a significant factor in why individuals choose to go down the franchising route, rather than start up independently.
Franchisors actually have two separate overlapping brands to worry about. They have their "customer facing brand" - just like any other non-franchised business - which determines why customers seek to buy the products and services that they sell. In addition, they have their “franchise brand” which determines why a potential franchisee would invest in a franchise opportunity with them rather than a rival franchise.
To a certain extent, these two brands go hand in hand. The “customer facing brand” forms a key driver in the franchise brand because, as a potential franchisee, you probably wouldn’t want to invest in a franchise that doesn’t have a strong customer facing brand! If a customer facing brand is tarnished then the franchise brand will suffer too (however, it does not necessarily follow that if a franchise brand is tarnished, the customer facing brand will suffer).
Anyway, to avoid digressing, the purpose of this article is really to provide some tips on protecting your brand (both the customer facing brand and the franchise brand).
1) Register your Trade Mark
This is very much the starting point for any potential franchisor. You should register your brand name and primary logo with the Intellectual Property Office. You may wish to register other logos and straplines, but to start with you should protect your most valuable and commonly used assets.
There are numerous benefits to registering your Trade Marks, the most important being that it becomes much easier to enforce your rights against would be imitators. If you don’t have your trade mark registered then you might find an infringer beats you to it! You may then have to fight to prove that you had “prior rights” to the Brand which they have subsequently infringed. It is without a doubt easier (and much less costly) to get your name and logo registered early on.
While it’s all well and good having your brand registered, you still need to keep your eyes open for damage to it. Potential damage can come in many forms and from both inside and outside your organisation:
There are plenty of businesspeople who see no harm in trying to piggy-back off the success of others, seeking to replicate or imitate a Brand. This is often deliberate and blatant, occasionally accidental (where a designer may have stolen some images from Google Images) and every once in a while, frustratingly clever (where the infringer has done just enough to stay on the right side of the law).
It is important to keep checking search engines (Google essentially…I’m sure others are available though), social media sites (Facebook, Instagram, Twitter etc.) and food portals (Deliveroo, Uber Eats, Just Eat etc.) on a monthly basis to see if any “entrepreneurial” individuals might be trying to take advantage of your brand. This isn’t necessarily a complicated task and can be outsourced to a third party to monitor using clever technology.
To assist with monitoring, you should encourage franchisees to let you know of any infringements in their local area. I also have one client whose customers occasionally spot infringements and are so loyal to the brand that they get in touch (with pictures) to allow us to take enforcement action.
“It takes 20 years to build a reputation and five minutes one bad franchisee to ruin it.”
This, shamelessly stolen and butchered quote from Warren Buffet, is perhaps one of key reasons for successful businesses choosing not to franchise. By franchising, you are putting your Brand in the hands of someone else. As such, you need to make sure that those franchisees are the right fit for your brand. To quote Ray Kroc (as all good franchising articles should):
“You’re only as good as the people you hire.”
I appreciate that this is a very flippant comment and I don’t profess to have expertise in franchise recruitment. However, what I would say is that, in addition to recruiting well, you need to have the processes and procedures in place to monitor what franchisees are doing and saying, certainly until you have the confidence that they are “on brand”. A few suggestions include:
Do you have access to edit/remove posts on franchisees social media?
Do you have the ability to contact customers of franchisees?
Do you have rights to conduct mystery-shopping exercises and spot-checks?
All of these are well worth considering in order to protect the Brand as best you can from a rogue franchisee.
A franchisor has, in my view, a duty to diligently enforce its Brand and to protect its Franchise Network. As mentioned, the Brand is key to the value of the franchise and is an important reason for franchisees signing up to the franchise agreement. Enforcement action generally takes a number of steps and, depending on the seriousness of the infringement, you can jump straight to the last point if you so choose. The usual steps might be:
make contact to alert the infringer to the issue - it may have been an accident;
if the infringement is on the internet, use any Take Down Request function that may be available to ask the site owner to remove infringing content;
if you don’t get a response, ask your lawyer to issue a Cease and Desist Letter requiring them to cease infringement or face the consequences; and
if still no response, commence legal proceedings seeking an Injunction (England and Wales) or Interdict (Scotland) to force the infringer to stop.
I would always advise that you keep your Franchise Network up to date on the steps that you are taking to protect the Brand.
It’s also important to take action internally as well. If a franchisee isn’t playing by the rules and is damaging the Brand in the eyes of the rest of the network then it is important to take any necessary action to attempt to bring the franchisee back into line or, if need be, remove them from your Network.
4) Innovate and Enhance
My last observation or piece of advice on branding is a cautionary tale from Canada involving a subject close to my heart….doughnuts.
In 2012, a court in Quebec awarded a group of former Dunkin Donuts franchisees a total of $16.4 million in damages from Dunkin due to what was described as the “Tim Hortons phenomenon”. The group of franchisees were successful in arguing that Dunkin failed to protect and enhance its brand. They claimed that Dunkin sat back and ceded the territory to Tim Hortons (in 1998 there were over 200 Dunkin Donuts in Quebec, but by the time of the judgement, there were only 11). Whilst there was a lot more to this case, the essence was that the Court considered that it was incumbent on the franchisor to try and fight off competitors and “hold the ground” for the franchise network.
As many motivational, posts and memes say: “to stand still is to fall behind”. As a Franchisor, innovation and growth to your brand and business is one of the best ways to keep franchisees happy and keep would be copy-cats trailing in your wake, trying to catch up.
Next up…‘C’ is for ‘Consultants’