Should You Buy a Franchise That Is In the Process of Upgrading Its Branding and Logo?

August 23, 2011 by  Filed under: Branding 

Over the years, I’ve studied the franchising industry, and I’ve been involved with it intimately. You see, before retirement I founded a franchising company. One thing that’s important for companies with strong brand names – and franchisor’s do have to watch their brand name very closely, as that is what helps drive new franchise sales, and that’s what brings consumers and clients into those franchised outlets – is that franchisors occasionally need to upgrade their logos and branding image to fit the changing of the times.

However, there have been some absolute disasters with major franchising companies who lost their identity, and in doing so diminish the value of their brand name in the minds of their greatest and most profitable customers. It’s very easy to do. Now then, let’s say you are considering buying a franchise, and you recognize a very strong brand name, which you probably see every day in the marketplace. Perhaps that’s what attracted you to consider purchasing a franchised outlet from that company in the first place. Well, what would you say if they were getting ready to change their logo, their marketing, and all of their branding?

In some regards you might think this is good, because you won’t have to buy all the new signs, and change all the logos in your store because you will come in with the new branded logo. Yes, that’s totally true, and that would be a wonderful thing if they were going to change, as you wouldn’t have to go through the additional cost that all the current franchisees are going to have to bare. Generally in the franchise agreement there are stipulations that the franchisor may change the logo and brand at any time, and the franchisees are obligated to pay the cost for their local outlet to make sure it matches.

Now then, what happens if the franchisor botches these changes, what if the new brand and logo is not accepted by the customers, what if it turns off their top clients? In that case you will be buying a franchise from a franchisor who has severely diminished their brand name. In that case what you think you are buying, a solid reputation, logo, and branded franchised outlet is all of the sudden no longer the case. This means when you go to sell your franchise in the future, there will be fewer buyers, and you aren’t getting the benefit of that brand name on the way in. In that case may I ask; why you are buying the franchise?

Indeed, I hope you will please consider this, and look very carefully at what a franchisor is doing and if they are moving to transition their current logo and brand prior to investing in a franchise. Look at it very closely, make sure it makes sense, or you will be paying the price for it later. Please consider all this and think on it.

Lance Winslow is a retired Founder of a Nationwide Franchise Chain, and now runs the Online Think Tank. Lance Winslow believes writing 24,500 articles by August 24th or 25th will be difficult because all the letters on his keyboard are now worn off now..

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