Franchise Brands: More than a Logo

Franchise Brands: More than a Logo
March 9, 2009

In franchising, it’s not just the corporate logo that needs to be carefully guarded, although that’s important. It’s the logo plus everything else—corporate colors, signage, buildings, trucks, uniforms, products, services, prices, promotions, ads, window posters, and even mundane stuff like pens, wrappers, and every collateral item in existence.
SUBWAY restaurants, named the #1 Global Franchise Opportunity for 2009 by Entrepreneur magazine, has more than 30,500 locations in 87 countries. Imagine what it’s like to control every aspect of the SUBWAY brand in every franchise location around the globe.
If it sounds like a major headache-inducing challenge—well, it is. “Multi-unit franchises may face a variety of difficulties along the way toward building brand consistency,” says Gary Findley, CEO of the Findley Group, in Franchising World (“Consistency: The Key to Branding," April 2007).
“Balancing brand uniformity while respecting franchisee independence and regulating brand messages while effectively targeting local communities are two of the struggles that often arise.”
Findley believes the only way to control the brand is through RQM—repetitive quality marketing.
“In RQM, repetitive is remaining persistent and consistent with the marketing message,” Findley says. “In RQM, the overall objective is to remain consistent.
Consistency in the marketing campaign will not only strengthen the brand identity, but it often leads to positive business growth.”
In the franchise world, however, marketing consistency takes on a whole new meaning. “…marketing touches everything a business does,” Findley says, “from the design on the bathroom tiles to the rips in the salesperson’s jeans, and anything a customer sees, touches, hears or smells can affect the brand image.”
For large and small franchise operations alike, educating franchisees about the value of the brand is often the first and most important step.
Taylor Bond, CEO and president of Children’s Orchard, a US-based children’s clothing resale franchise, explains it this way in Franchising World (“Communicating the Brand,” February 2005): “…we have aggressively focused on communicating the ‘picture of value.’ That means we have done everything humanly possible to help our franchise owners understand that the brand is the market share.
We explain that the brand is a mental message, a picture that consumers connect to their store.” Bond says smaller franchisors should point to the success of large global brands to get their franchisees “to understand and embrace the value of the brand.” It’s crucial, he says, to “tie the brand directly to the value of the business.”
In large, sophisticated franchise operations, the franchisor maintains control of the brand through numerous means, including franchisee training programs, comprehensive brand guidelines, and providing franchisees with consistently executed branding and marketing materials.
Providing brand guidelines is not that difficult, but enforcing them across a far-flung franchise system is another story.
“While many franchise systems provide their franchisees with guidelines about logo usage, signage and advertising, many fail to fully enforce those guidelines,” says Nikki Sells, vice president of franchising for Express Personnel Services, in Franchising World (“Consistent Brand Identification Increases Market Share,” December 2006). “This is why a customer can go from one unit to the next and have a completely different experience with the brand.
Enforcing clear guidelines will not only help franchises stay true to the brand when marketing, it will also improve customers’ experiences.” Sells says it may take site visits, customer surveys and focus groups with field reps to determine adherence to brand standards.
That’s why superior global franchisors such as SUBWAY and McDonald’s make franchisees part of the solution. McDonald’s requires its restaurants to spend a minimum of 4 percent of gross sales annually for promoting and advertising the business. Owner/operators work with local agencies to place advertisements and, in some cases, produce their own creative material, as long as it follows system guidelines.
McDonald’s also encourages its operators to offer feedback and ideas that could benefit the entire system; the Big Mac, Egg McMuffin and Filet-o-Fish sandwiches were all developed by owner/operators.
International branding is particularly difficult. Language and cultural issues present unique challenges for franchises. For food franchise systems, local cuisine preferences may require entire menus to vary. McDonald’s, for example, operates in India but does not serve beef there.
Instead, the Indian system offers a choice of vegetarian and non-vegetarian menus; the non-vegetarian menu is comprised of chicken and fish. Product names retain the McDonald’s branding concept but are country-specific: McVeggie, McAloo Tikki, Shahi Paneer McCurry Pan and Veg Pizza McPuff.
Challenges not withstanding, globalization is a means of rapid brand expansion. US-based Yum! Brands, owner of KFC, Pizza Hut and Taco Bell restaurants, has enjoyed widespread acceptance for its franchise brands around the world. The KFC business in France has the highest unit volumes of any KFC in the world. For the last four years, Pizza Hut has been ranked as the #1 most trusted food-service brand in India in a consumer survey in The Economic Times.

Mainland China is Yum! Brands’ top market for new company restaurant development worldwide. The company opened 471 new restaurants last year in mainland China. KFC, with more than 2,300 restaurants in China, is the leading quick-service restaurant brand, while Pizza Hut, with 400 locations, is the leading casual dining brand in mainland China. Yum! Brands says it opens a new KFC every day in mainland China. In 2007, operating profits for Yum! Brands’ China Division were more than US$ 375 million.
When a franchise system decides to change its brand, the implications are mind-boggling. In 2001, global shipping giant UPS acquired Mail Boxes Etc., a private postal center service. In 2003, “The UPS Store” brand was introduced. Tests in select US markets pitting The UPS Store against Mail Boxes Etc. showed a strong preference for The UPS Store. That meant thousands of US-based Mail Boxes Etc. stores had to be rebranded. Stores in Canada were rebranded in 2005. Stores outside North America, however, maintain the Mail Boxes Etc. brand. UPS currently operates over 6,000 stores worldwide.
Despite the arduous requirements of global branding, the business opportunity associated with a strong international franchise is unparalleled. Controlling their brands across thousands of locations is a key reason leading franchise systems succeed—and why their brands are among the most recognized in the world.