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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.

You might need rebranding if…

17 Nov

The recent Gap rebranding debacle gave brand folks like me ample opportunity to gas on about (pick one):  a) how foolish Gap was; b) what a clever ruse they’d created; c) how social media saved the day; or d) how quickly Gap responded (or caved, if that’s your point of view). But while plenty of digital ink was spilled about all that, I saw very little commentary about what SHOULD have provoked The Gap — or any other company — to take the rebranding plunge. How do you know when it’s the right time for a company to take a hard look at its brand and stir it up?

As Gapgate showed us, rebranding is a big deal. And it can take many forms: a change in “behind-the-logo” fundamentals; logo and tag line changes; a name change; and anything else in between. Putting all the forms of branding aside for a moment, let’s look at how to know when it’s time to consider the disruptive step of rebranding.

So, with apologies to Jeff Foxworthy and his “You might be a redneck if…” schtick, you might need rebranding if…

#1: You’ve lost market position.

If you were number one ten years ago and number three now, or number three two years ago and number six now, you better start fixing something. Tinkering around the edges won’t get you back to the top spot. Consider your brand. And by “brand,” I don’t mean your logo. If you’re not connecting with customers, there may be something seriously off, not only in in your brand fundamentals, but in your business strategy, or maybe in how your brand reflects your business strategy. In The Gap’s case, if they were worried about their market position, a logo change alone was the wrong answer. Maybe a more thorough brand initiative may have been a good idea. But I’m not sure they had really lost much market share; the market has simply been in a slump and sales have been lackluster.

#2: Your organization has (or is about to) change its business strategy substantially.

Apple is a great example of how a business strategy (to make people’s lives more interesting through digital products) is reflected in a branding strategy (sleek, simple, witty, smart). If they were to change their business strategy (and God knows why they’d do that) to one based on delivering productivity solutions to Fortune 500 companies, they would obviously consider rebranding. Companies don’t usually change their business strategies on a whim, but may find that those strategies have evolved over time, because of mergers and acquisitions, changes in the category, or simply because of the passage of time. Those are the moments to consider brand brush-ups, even if the correct decision is to hold off. If The Gap is seriously changing its business strategy, it certainly isn’t apparent.

#3: Your brand has outlived its customers.

Cadillac is a good example of a brand that had to evolve its brand before its customer base went extinct. They added a good bit of power and speed and updated their vision of glamor. And it’s worked, even though they didn’t change their logo. Pepsi tinkers with its branding every few years, to keep up with a young market that continually replenishes itself with new faces. They evolve their brand to maintain it. I find that many companies consider rebranding at about their twentieth year of existence. I’m not exactly sure why, but it seems that’s about the time the original vision, leadership and customer base have turned over. The Gap was started in 1969, then — for a variety of reasons — changed considerably in the 80s to become the store we know today. Maybe it IS time for a brand evolution. But — like with Cadillac — maybe tossing out your heritage with your logo isn’t the best way to start.

#4: Your marketing just isn’t working anymore.

Okay, I’m not espousing brand overhaul as a solution to a flawed marketing program, but… If your marketing has lost its luster, AND you’ve dialed through a number of strategies, AND your execution is sound, AND others in your category have been driving sales, you think just maybe you have a marketing problem that marketing strategies and tactics alone can’t solve? If your marketing is struggling to leverage a weak brand, you’d better strengthen the brand. I suspect this was the thinking behind The Gap’s rebranding: “Our advertising is world class, but sales still suck. Let’s rebrand.” Maybe the idea wasn’t such a bad one, even though the execution may have been wanting.

One more note: all of the “ifs” above relate to building long term growth. Rebranding, brand development, or whatever else you want to call it, should be undertaken with financial goals in mind. If not, don’t bother.