How Franchisors Can Protect Their Brand?

19/02/2018 08:00 | Start a business

Protect your franchise brand

Are you a franchisor considering franchising your business or extending your current franchise network? Whether you’re planning to expand across the region or the rest of the world, here is some advice on how you can protect your franchise brands as a franchisor:

Five ways to protect your franchise brand:

1. Ensure your franchisees represent your brand consistently

One of the most important strategies for protecting your brand identity is ensuring all your franchisees send the right messages so they represent your brand consistently.

For example, the most popular franchises with highly successful concepts will provide detailed guidance on the brand’s tone of voice and how franchisees should communicate with their target audience. Ensure the décor, signage, logo, slogan and other brand literature and aesthetics are the same in every franchise so people will be able to recognise your brand in different locations.

Certain words or phrases may need to be avoided if there’s a chance they could lead to negative or inaccurate perceptions of your brand. You’ll also need to make sure your franchisees have the confidence to carry the concept forward and act as great ambassadors for the brand.

2. Give you trademark the best possible protection

Many franchisors will trademark their brands to prevent third parties from using the same name or a similar name that could be too alike. For example, McDonald's probably wouldn't be happy if a donut brand decided to call itself 'McDonuts', because this would sound too much like the former (and McDonuts was once a McDonald's product).

Indeed, in 2016, the restaurant brand won a lawsuit against a Singapore restaurant that attempted to register 'Maccoffee’ as an EU trademark for its food and beverages products. The high court ruled in favour of McDonald's claim that it had exclusive rights to use the terms 'Mc' or 'Mac' as trademark names for its food and beverage products.

Therefore, make sure you trademark your brand name and the names of individual products, otherwise you'll have less legal protection if another brand already uses the same name or uses it later.

3. Provide the right type of training and support

To ensure your franchisees can provide the highest standards of training for their staff, you need to have the right training and support infrastructure. For example, a food franchise will need detailed guidance on health & safety to minimise the risk of food poisoning or any other incidents that could violate health & safety codes. A gym franchise will need to ensure members of staff can provide clear demonstrations on how to use the gym equipment, and ensure the layout of the gym does not breach any workplace fire regulations.

Typically, franchises will provide initial training to make sure franchisees can operate their business confidently and with minimal intervention from the head office. Many will also provide ongoing training and support so franchisees can stay up-to-date with the latest technology, learn about any new workplace regulations (i.e. health and safety requirements), and continue with their professional development. Make sure you give clear guidance in the franchise agreement on what sort of training your franchisees can expect so they can determine if this is the right opportunity for them.

4. Minimise your reputational risk

The widespread popularity of social media and sharing brand experiences via outlets like Instagram and Snapchat has enabled brands to reach out to bigger audiences than ever before. However, there is always a risk that some of your social media content could get a bad reception and cause offence to people within or outside of your target market. This can expose your brand to reputational risk, which can impact not only on the success of your franchise, but every other franchise operating under the same brand.

In 2016, Norton Rose published a report entitled 'No time to think: Reputational Risks and Social Media', which highlighted the fact that nearly 60% of companies have no social media risk assessment, and more than half of brands have no strategy to manage their social media complaints. It identified the main sources of these risks as intellectual property, major crisis, employee conduct, your own conduct and 3rd party conduct, and advised companies to prepare, monitor, assess and respond to all potential reputational risks. This includes everything from employee behaviour on social media to engaging with unsatisfied customers effectively.

Therefore, make sure you train your franchisees on how to engage with customers and the public (if they have a customer-facing role). It’s also a good idea to regularly monitor your hashtags to ensure no one else is posing as your franchise brands or using the same hashtags for another concept, as this could also expose your brand to reputational risk.

5. Choose the right location

A franchise can never succeed if it’s in a poor location, even if the brand has many popular franchises that are performing very well in other sites.

Therefore, if you’re selecting the location for your franchises, make sure the prospective site will have sufficient footfall. For example, a franchise in a busy location could still fail if people can't find it or there's too much competition in the area. This could also happen if the franchisor chooses an exclusive territory that is too small, or if the territory is too large and creates more demand than the franchise can handle.

Many franchisors have special criteria for selecting sites, while others may allow the prospective franchisee to choose the location. Factors to consider include the accessibility of the location to the nearest transport facilities, the visibility of the site from areas with high footfall, parking facilities, and whether there are any big construction projects or repairs planned in the area soon (i.e. new buildings or waterworks repairs).

Don’t forget to consult a franchise solicitor

Before you sign a franchise agreement with a new franchisee, make sure you get independent advice from a solicitor with expertise in franchise law. They can help you understand the terms of the contract and make sure you understand your rights and obligations as the franchisor.

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