Archive | Franchising RSS feed for this section

Interested in franchising? Be careful with your name!

22 Nov

I took a meeting the other day with an erstwhile restaurant franchiser who was eager to take her first steps toward becoming the next Panera Bread. Let’s call her “Fran.” Fran’s restaurant was hopping, people were raving about the food all over Yelp, and with a little polish her brand concept could be different than any other out there. So she was ready to make it happen, right?

Wrong. She didn’t have a trademarked name. What’s worse, the $450/hr. IP attorney we’d invited had serious doubts about whether she’d ever be able to trademark her current name. And why is a trademark so important? Because without it, Fran has nothing to franchise. What budding franchisee wants to plunk down $300k+ to open a restaurant that could be the subject of a cease and desist letter or worse?

Now this isn’t a total show stopper. It’s not impossible to create a new name, logo and all the trade dress that goes with it. But who wants to lose the hard won equity in the name they invested in from the get go? And renaming isn’t easy, either. Especially in a world where it’s becoming more difficult by the minute to find a name that’s not taken. Just ask the folks at Panera Bread, who when they started franchising had to drop their St. Louis Bread Company name (too generic) to become Panera .

So if you believe you will ever be interested in growing out of your single location, take some time to start with a name you know you can keep. Here’s how:

  • Create a few names that fit your brand and aren’t generic, i.e. they aren’t just based on a place (like St. Louis Bread Company), a common dish (The Spaghetti Place), or a type of establishment (The Bistro). This sounds easy, but it’s not. In fact, many words have been written about what makes a good name and how to create one. I’ll spare that discussion for another time. (But if you want to check a couple cool sites about naming, try these: Igor and The Name Inspector.)
  • When you have a few names you think might work, do some quick searches in the U.S. Patent and Trademark Office’s online Trademark Electronic Search System (TESS). It’s not difficult. If you see any of your names on the list, get rid of it.
  • One hopes after this exercise you have at least a couple remaining acceptable names. Now it’s time to bite the bullet and get an intellectual property (IP) attorney to help you. I say this with full knowledge that there are ways to do it yourself and plenty of online services that say they can make it happen for a couple hundred bucks. I have seen those methods work. But I have also seen disasters. Please, hire an attorney.
  • The first thing the attorney will want to do is conduct a global search, probably through a company called Thomson Compumark. It should cost less than $400. Do it.
  • Within a couple weeks, the attorney should have a very good idea of the availability of your names. Assuming you have at least one option, you ought now to feel comfortable dressing your new name up in a logo (with a ™ to protect it until your registration passes) and moving ahead with your plans.
  • It will take a few more months for the attorney to file paperwork and for the USPTO to register your name (at which time you can switch to a ®), but you should be home free.

Total cost for this whole operation should be less than $2,000. That’s not inconsiderable for a start-up. But before you take a short cut, consider our friend Fran, who is now looking at starting all over again. Seriously, do it right.

Brand Promo: The 9% Solution

2 Jun

You want to know how to kick start a brand in a new territory? Hint: it’s not Facebook.

Our client is a franchise restaurant with a new franchisee who’d been sucking wind since opening his Kansas City-area location about a month ago. Was the location lousy? Right behind the Wal-Mart — probably not. The food? Nope; they sell a fantastic charbroiled burger and fries at a reasonable price in a pleasant fast casual atmosphere. Besides, there hadn’t been enough customers since opening to judge the food good or bad.

We‘re engaged to help the franchisor build their brand for the long term. But this franchisee needed help — fast. With limited money, a fractured media environment and a ticking clock, we opted for a traditional solution — direct mail promotion — figuring if we could get a 1% response rate, delight the new customers, collect some contact info, and follow up, we’d help save the location and worry more about the brand essentials in the morning.

To his credit, the franchisee was willing to pony up a serious promotion — a free 1/2-lb. burger, fries and soft drink, no other purchase necessary.  Doesn’t get much better than that. We created a strong oversized postcard, communicated the brand essentials, and let it fly.

What a pleasure it was when we got the email one afternoon about lines of customers leading out the door into the parking lot. All told, we made almost a thousand new customers in less than two weeks — over a 9% response! And all of them sampled the signature dish.

Was the promotion a substitute for strong brand development? Of course not. Can we promote our way to success? No way. But in case we needed a reminder, we proved plenty of customers will respond to a big ol’ promotion simply delivered. And once you make new customers, a strong brand will keep ‘em.