Franchise co-branding is becoming more popular. This refers to two or more franchises operating under or sharing the same space. The easiest way to envision this is by picturing a fast food restaurant inside of a gas station. You’ve likely seen one of these establishments during your travels, where the two businesses share a building. This doesn’t just occur with gas stations and fast food restaurants, though. You may have a coffee house inside a bookstore or a dessert chain inside a restaurant. If you own a franchise system or are considering buying one, you may be considering co-branding it. Learning about the advantages to this will help you decide if it is ideal for you.
Increased Brand Recognition
One of the biggest benefits to placing two franchises under one roof is that you have increased brand recognition. Customers may not always recognize one franchise, but when you pair it with the other, it is going to increase the other brand’s visibility and customer base. It also helps to draw customers in. They may not have stopped if you just owned the lesser known franchise but will stop because they recognize the larger one and give the smaller one a try while they are there.
Serve Your Customers Efficiently
Another benefit to franchise co-branding is that you are able to serve your customers better and make more money in the process. Some of your customers may stop in the morning and pick up a coffee and get gas. If you offer both gas and coffee, you make life simpler on the consumer, while also earning money off both of those sales. More customers are looking to make fewer stops and do more things in one trip, so this is a win-win all the way around. However, you do have to do your research to learn what your customers are looking for. Some franchises simply don’t pair well or don’t attract the same types of customer base.
The last benefit to franchise co-branding is that your two franchises can share costs. Instead of opening a separate gas station and fast food restaurant, the businesses can share one building, share electricity and employees can serve both entities simultaneously. This results in lower overhead costs for you, which ultimately adds to your profits.
Do you own a franchise system or are you looking to purchase a franchise? A franchise attorney can help you with everything you need to know about franchising and co-branding from a legal standpoint. If you want an attorney to look at your marketing plans, purchase agreement or any other information, consider Shelton Law & Associates. We can help you with all of your business law needs. Give us a call today to set up an appointment to discuss your business objectives.