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Franchisor, you think you’ve got a strong brand and you probably do. You think that’s why you sell franchises and it probably is. It’s at least one of the main reasons that you sell franchises and prosper from your existing network.
You also think you own and control your brand, but you don’t. Your franchisees do!
Now that doesn’t sound right, does it? We tell franchisees that they don’t own anything except the equity they build in their businesses (and some franchisors try to take that away, too, or in some businesses the equity never amounts to much).
So why would I say franchisors don’t own their brands — the franchisees do?
No brand no company
Like a soul, brand isn’t something that you can reach out and touch. You can’t count it, stack it, or hold it and admire it. But it’s there! Every company has a brand, and if yours isn’t valued your company is lost, which means it will eventually disappear.
As a franchisor, you are responsible for nurturing the brand, giving it life and keeping it healthy or valuable. You do that mostly through character qualities, especially trust. Customers — in your case, franchisees — watch how your company behaves, how it handles itself, how it’s led, and how it delivers on its promises. Then they size up your brand value. What other customers say about you, your company, your leadership, your character qualities — those opinions count most. And the evaluation never ends — it’s ongoing.
Not a time to flub it up
Cultivate a cherished brand and your brand value increases, which helps you sell new franchises, more products, and helps you keep the franchisees you’ve already acquired as customers. However, flub it up and your brand gets tarnished and your company’s financials slip in value. Who wants to be associated with a tarnished brand?
“For customers to trust a company and its products,” says author Stephen Denning (The Leader’s Guide to Storytelling), “they have to know what sort of company they are dealing with, what kinds of values it espouses, and how its people approach meeting customers’ needs.”
Some franchisors have flubbed it up
It’s a tall order for franchisors, especially in this economy. Some franchise companies that once had cherished brands have watched their brand value diminish in recent months. The franchisees have rejected, or at least hold suspect, the franchisor’s intentions and promises.
Denning also says, “Strong brands are based on a narrative — a promise that the company makes to the customer, a promise that the company must keep. It’s a story that the customer has about the company and its products and services. The brand narrative is owned by the customer, not the company.”
Is this your reality?
Frightful thoughts for many franchisors today, but it also explains their reality. The franchisors that stopped delivering on their promises are struggling not only to sell new franchises but to keep existing franchisees in place. They’ll continue to struggle even after the economy recovers.
Meanwhile, franchisors that have continued to invest in their brand — which is not the same as investing in advertising — continue to prosper largely because their customer network still supports — even cherishes — the brand. You can’t help but admire the franchisors that looked the economy in the eye a year or so ago and said, boldly, “We’re not surrendering our brand to you! We’ve worked too hard, spent too much, to cultivate it. We realize its significance.” Understandably, and deservedly, those companies continue to sell franchises and they’re poised for significant growth in the coming months. Those are the franchises that customers want to buy today!
Time, money can recover a brand
A franchisor can recover a tarnished brand — we’ve seen it occur numerous times in the last 30 years — but it takes time and money. It takes leaders — not minions! However, during the recovery, competitors step in and capture market share and the once dominant brand is never the same (as valuable) again.
Bottom line: If you’re building a brand, and you must if you’re in business, it’s critical that you build it right from the start and continue to invest in it appropriately, even during a sluggish economy.
Special note to franchisees
Franchisees, you may be pounding your chest, relishing your newfound power, but don’t get carried away. You don’t own your brand, either. Your customers do!
Coming Soon
How To Capture & Keep The Right Franchisees! A webinar for franchisors and franchise developers. It’s more important than ever to cultivate your franchise network, but many franchisors are struggling, and will continue to struggle, because they captured the wrong franchisees. The sooner you know what makes a right franchisee, and then capture only those kinds of franchisees, the sooner you can put your franchise company on the road to recovery and into the franchise limelight. Want to know how you can register for this webinar? Click here and ask via email!
Photo image by: cote
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