5.02 – Franchise + Brand = Success

The brand is a franchise system’s most valuable asset. Consumers decide what to buy based on their perception of the brand. Typically, they don’t consider who owns the local franchise; in their minds, they are interacting with a branch of a larger chain. This mindset is evident in the signage most franchisors require, which notifies the public that the location is locally owned and operated. Essentially, a company’s brand equates to its reputation.

Franchisors invest considerable time, energy, and money to ensure consistency across all their locations. This consistency is a significant advantage for new franchisees, promising them a steady flow of customers. A strong brand can communicate a positive message to customers. Conversely, a negative brand experience can tarnish the entire brand’s reputation. With a strong brand, consumers can anticipate and almost feel the experience they will have even before entering the local business.

Positive brand recognition is the goal for every franchisee. A well-known and successful brand means new franchisees don’t need to build brand awareness from scratch, as the franchisor and other franchisees have already done the groundwork. This established reputation for positive brand experiences is a major advantage of well-established franchise systems.

However, brands don’t start fully formed. Smaller franchise systems or those with limited brand recognition need to work harder to gain consumer acceptance. New franchisees in these systems may need to spend more on advertising and promotion to build brand recognition. When reviewing a franchisor’s offering, prospective franchisees should note that the specified advertising budget is usually the minimum required, and additional investment might be necessary to establish the brand locally.