Co-branding

The franchise agreement is a document that franchise sellers are required to give you at least 14 days before accepting money from you. When you sit down and study it, you are sure to come up with terms that are unfamiliar to you. When you buy a franchise, you adopt the “brand” of the franchise and its reputation. That is one of the greatest benefits of spending the extra money to buy a franchise. Often you will see the term “co-branding” come up in your franchise agreement and you need to understand the definition of the term.

Co-branding is the combining of two or more brands into a single concept to leverage the positive features of the efficiencies of each brand. For example, twenty years ago people stopped to get gas at one location and then had to stop at a convenience store at another location to do a little shopping before heading to their destination. Co-branding combines a convenience store with a filling station to create a one-stop convenient shopping experience. The same is true with sandwich shops and hamburger franchises that are looking for high foot-traffic, low-rent locations. Co-branding an income tax preparation franchise with a “home cleaning” franchise probably would not work and you can see why. But ask yourself what products could a “home cleaning” franchise more effectively co-brand with? Maybe a vacuum cleaner and home cleaning products franchise? Or a home-painting franchise? Any home product that could be sold as an add-on to the home cleaning experience might make sense. The home cleaning franchise in this example might also offer home delivery meal service to its busy customers. People who want to have their homes cleaned might also want to have their automobiles detailed and their laundry and dry cleaning done for them. As you can see, there are many synergistic franchise or license ideas that a franchise can use to leverage their valuable position of being inside a client’s home or office.

Regardless of the franchise opportunity, you need a franchise attorney to review the franchise agreement to see if you are permitted to “co-brand” the franchise you are offering. Give franchise attorney Mario L. Herman a call today for a free consultation.