What Is Franchise Co-Branding?

Franchise co-branding is when two companies operate in conjunction with one another. Usually, both share the same building or piece of property, and both company's brands or products are displayed.

An example of this is when a deli sandwich shop opens up in a truck stop, or a fast-food restaurant operates inside a major retail store. Another example is a motel which either shares building space with a restaurant or has a restaurant located either on or immediately adjacent to the premises.

Franchise co-branding is becoming very popular. Franchisers and franchisees are seeing co-branding as a way to increase the profit margins of both entities. Their thinking is "Anything that will get people through the door and into the store."

When co-branding works right, that is exactly what happens. And, one way that franchises that participate in or are considering participating in co-branding can ensure success is by capitalizing on the strength of each business.

Consider this: an eatery that offers particular food choices, such as soups, salads, and sandwiches may consider co-branding with a bakery or ice-cream shop. The soup/salad/sandwich business will attract the lunch and dinner crowd (and breakfast crowd as well if it sells breakfast items). The "sweet shop" will draw in those looking for a between-meal snack or treat or those who want dessert after their lunch or dinner.

If both businesses make the effort to offer items that can be consumed no matter what the season, they stand to further increase their profits. There will be no "lull" simply because of the fact that it isn't the "right season" for something.

If they can reach an equitable agreement, and if it is in keeping with the master franchises' policies, it may not be necessary for both businesses to operate each and every time one is open. For instance, if the "sweet shop" franchisee wants to be open for business on the weekend or during a holiday, but the other franchisee does not, that is entirely possible. Or, both may agree (again while considering and following master franchiser policies) to close at certain times.

Sometimes, however, franchise co-branding does not work for the better of either franchise. Lack of adequate space for the comfortable operation of both businesses, employee problems, and other difficulties may actually hinder the success of co-branding. Further, if one of the franchises causes the other to lose favor with consumers, both businesses can suffer as a result.

Careful attention to detail, close adherence to franchise policies, and open communication between all parties involved can prevent such problems.

To get all the details on any franchise, contact a franchise consultant at FranFinders.