Blog Post
Before you buy a franchise, consider the brand
Staff writer • Jan 21, 2020
Marketing Consultant and Founder of Firejuice, Bernard Jansen, explains what to consider from a marketing and branding point of view before buying a franchise.
You can't run a successful franchise without a strong brand. Yet many franchisees don't know this and struggle to make sales because of this very problem.
When you own a franchise or are the exclusive license holder for a brand in a territory, you inevitably understand the importance of marketing to drive sales, but often miss the critical role it plays in brand building. Long term, you need a strong brand to build a franchise.
Many franchisees think they inherit a brand from the onset and only need to worry about sales. While it may be true for well-established brands, such as KFC or Nandos, it often does not apply to smaller brands brought in from abroad via licensing agreements, or a Durban based business franchising out to owners in Johannesburg and Cape Town.
As a franchisee, you should understand what you are, in reality, buying: a brand. But a brand is not a brand because it has a following overseas, or a cool logo, or a funky name or even because someone calls it a brand. A brand is only a brand when customers recognise it as one, right in your area. The customer decides if it is a brand, and if they haven't made up their minds, you are either in deep trouble or have lots of work to do.
The problem is that most franchisees are unprepared when it comes to brand building. The fact that the franchisor, or owner in another territory, provides you with brand guidelines and marketing materials does not mean that now you can tick off the brand box. You still need to do the hard work of establishing it in the minds of customers.
So what should you do as an aspiring franchisee?
- First prize is to buy into a brand - a real brand that is recognised in your area.
- If you want to buy into a business with a brand that is unknown in your area, you should be prepared to do marketing activity that grows brand awareness in addition to driving sales. This can be difficult, and I would negotiate hard with the franchisor to assist in this for a launch period.
- If you already own a franchise that has a brand problem, I would suggest taking a couple of steps back and resetting your expectations. You need to go back and also build a story for the brand and establish awareness with customers, over and above driving sales. Marketing activity needs to work harder than if you already had a well-known brand. Marketing must now build brand awareness and build sales which takes much longer.
Too many franchisors sell licenses to entrepreneurs giving them rights to open the same business elsewhere, but without the same brand awareness. The result is almost always businesses that fail, or never really gaining traction - like a barbecue on a cold fire.
When you invest in a franchise license, make sure you also invest in a brand. If not, know one thing, your road to success will be twice as long.