Imagine owning a Fried Chicken shop that has survived the trials and tribulations of three generations of family ownership and still thrives in a neighborhood where global fried chicken franchises are struggling to keep up the flow of customers. A straw poll of your customers indicate that your operation is seen as delivering a quality product at the right price and that the taste is unique.
Taking this all into account you meet with the family shareholders and decide that time might be right to explore the launch of a franchise system. This decision will have far reaching consequences – your brand might be well loved in the neighborhood – but a misstep as far as optimising the your branding strategies can spell doom for the central brand, and any hope of launching your successful franchise system. To take the brand to the next, franchise appropriate level will require strategic thinking and an understanding of the brand dynamics, as well as what it takes to market a franchise brand in the 21st century.
Foundation of Franchise Branding System
The foundation of any franchise branding system is the foundation for most branding exercises –coming to terms with an effective brand positioning. In other words the franchisor must define what exactly the brand will deliver to the consumer, in other words its brand proposition, how it differentiates itself from competing franchise brands and the benefits that the consumer will enjoy –both psychologically and functionally. So as far as functionality is concerned we could imagine that the franchise that we are setting up in this case has counter servers that have been trained to be friendly and efficient, seated customers have access to free wi fi and there is a play area for children and that the delivery service is fast and offers a money back guarantee on delivery within a certain time period. Emotionally – does the brand experience gel with the internal picture that I have of myself.
Once these foundational issues have been dealt with then it is time to move on to how the emerging franchise can differentiate itself in a crowded marketplace where franchising has traditionally been seen as an easy entry in a crowded market. This is especially true where established brands are concerned. The challenge for the new franchise system is how to ensure that their brand is competitive with other, more mature franchise brands. In essence it is the challenge of brand differentiation.
Building Relationship with Franchisee
Perhaps the first step in building a relationship with the franchisee is to ensure that he or she trusts the support that they will receive the support of the owners of the franchise system and that the system that they are buying into has sufficient brand differentiation that will allow it to corner market share it what can be a crowded market. There are several ways that the franchisor can ensure that the franchisee has a level of comfort when it comes to brand differentiation and the positioning of the brand in the marketplace.
These can include:
- The provision of branded material such as packaging which clearly differentiates the product offering from that of the competition either through functional design or the appearance of the packaging.
- The provision of regularly updated in store display materials.
- Regular visits by franchisor sales and support staff to introduce new products on a cyclical basis and where necessary ensure that appropriate training of in store employees takes place.
- Provision of documentation outlining the brand promise and how the employees should deliver on that brand promise.
- Assistance in ensuring that the brand promise is being delivered by employees. Many franchisors employ so called ‘Mystery Shoppers’ to ensure that the brand promise is being delivered.
- Ensuring that advertising budgets (as part of the ‘ad fund’) are employed successfully.
An important point is that we live in a digital age. Today’s franchise system must take an integrated approach to communicating the brand values – and that means leveraging the power of online portals in order to ensure that franchisees enjoy the support of the franchisor when it comes to building and maintaining a relationship between the consumer and the brand. This can include website design and support to ensure compliance with brand values and appearance, as well as effectiveness of the consumer experience. It will in certain instances also include elements of social media to ensure that there is a real time feedback loop allowing the franchisee to quickly remedy any potential damage to the brand.
Possibly one of the most important yardsticks that consumers use to judge whether they will repeatedly engage with a franchise, especially one that is a newcomer to market is the consumer experience of consistency. It is only by consistently applying the brand across the franchise outlets that the franchise will bring back repeat customers, the lifeblood of a successful franchise network. If the franchise system does not have systems in place to ensure brand consistency it is headed for trouble. Consistency of brand reassures consumers that they will experience the same quality of service, product and experience.
Some studies have come to the conclusion that the strength of the brand equity makes up around 50% of the franchise offer. If this is correct then newly launched franchise systems need to focus with laser like efficiency on the development of brand equity. This can be a complex process and one that usually develops over time. An excellent example is Nandos brand of Portuguese chicken outlets. Once a small South African franchise operation it has grown into a franchise blockbuster, with operations all around the world. It did this through the application of a quirky brand identity that appealed to the emotions of the consumer – it remained committed to the brand philosophy, vision and purpose. That approach is one that new franchise systems need to internalise as part of their brand offering.
Franchising is an established business expansion strategy that has proven to deliver rapid growth but franchisors need to invest in education, motivation and compliance. From a branding perspective, it is important for brand owners to choose franchisees who understand the complexities of creating and growing brand equity and hence recognise the importance of adhering to brand identity and marketing gudelines. Franchisor cannot risk to have a cowboy in the team. By educating the franchise network on the risks of noncompliance to their own investment, franchisor will provid them with a rational reason to follow the rules and ensuring brand consistency. And constant motivating and monitoring, franchisor is ensuring that the brand is continuously strengthened in the market.
“More business is lost every year through neglect than through any other cause.”