Reading time: 7 minutes

If you are a franchisor, you may be concerned about protecting your brand and its associated goodwill. Branding and goodwill are critical aspects of any franchise network. They are part of the reason why a franchisee will buy a franchise and are integral to the value proposition of joining the franchise network. Franchisors need to protect these elements to ensure their franchisees continue to benefit from the value associated with the brand and goodwill. This article will discuss the different methods of protecting the franchise brand and goodwill.

How Can I Use a Trademark to Protect My Brand?

A trademark is any sign or symbol that is used to distinguish the origin of your services or products. It could include a: 

  • name; 
  • slogan; 
  • logo; 
  • image; 
  • colour; or 
  • shape. 

You will have used one of these signs when setting up your business and franchise, usually the name that you operate under. Customers use these signs to identify your brand and set your services apart from others.

Registering a trademark will give you intellectual property rights over that particular name or logo used by you. A franchisor may want to trademark:

  • their business name;
  • their logo; and
  • any images they frequently use on the packaging or other unique parts of their branding.

Registering a Trademark

A registered trademark will help you prevent competitors from copying your brand’s distinguishing features. You can register your trademark by applying to IP Australia. Firstly, you will need to research whether there are any other existing businesses with similar branding and logos before lodging an application. If there are similar existing trademarks or branding, your application may be unsuccessful. Additionally, you may want to lodge a pre-filing report before the application. Once the application has been lodged, it will take seven to eight months before it is granted. 

Once your trademark is approved, you will own the exclusive rights for its use. If any competitors use a similar mark, this will allow you to make a request to stop their use. Further, if this fails, you will have a legal avenue to prevent further infringement. A registered trademark adds value to your business and is an excellent way of preventing other competitors from copying your branding or taking advantage of the recognition of your brand.

Will My Franchise Agreement and Operations Manual Protect My Brand?

The franchise agreement will set out the terms of the franchise relationship and the obligations of the franchisee. Similarly, the operations manual will outline the business processes and procedures and standards to be complied with by the franchise. It is important that these documents set out the strict requirements of the franchise to ensure the consistency of quality of product and services across the franchise network. Your delivery of quality products and services across the network will continue to build your brand reputation and goodwill for the franchise network.

The franchise agreement and operations manual should set out how to run the franchise business and pass this knowledge on to your franchisees. Furthermore, incorporating your skills and trade secrets into these documents will help franchisees replicate your successful business model. The quality of the documents will add value to the brand by ensuring uniformity across the franchise network. Additionally, it will enable you to hold your franchisees to the standards that have been set out.  

Will Franchisee Selection Affect My Brand?

Franchisors should develop franchisee selection and recruitment processes to: 

  • ensure continuity and quality across the franchise network; and 
  • continue to build the brand. 

Franchisees will act as your ambassador for your brand to your customers and other prospective franchisees. Therefore, it is important that you carefully consider who is the best fit for the business and ensure that they are invested in the culture of your franchise network.

Franchisors should consider their target demographic for prospective franchisees. If your franchise requires a particular skill set, you should consider which individuals are likely to have those skills and how best to appeal to those targets. 

The interview process for prospective franchisees is also important. You will need to determine which professional and personal attributes add value to your business. Your due diligence and research on prospective candidates will be valuable when deciding who is the best fit for the business. 

Following the selection of franchisees, franchisors will need to develop a training program. The training program should help franchisees’ consistent and uniform services across the network. This is the best opportunity for franchisees to learn about brand standards and develop their skills to best suit their business processes.

The quality of the training program will determine how well a franchisee is able to operate the franchise business and represent your brand. 

How Will Value Propositions and Franchisee Retention Affect the Value of My Brand?

Value propositions are a critical component of franchise businesses. These propositions set your franchise apart from others. They will attract customers and franchisees to your brand. Franchisors will need to consider what sets their brand and business apart from others. These are your: 

  • unique value propositions (UVP); and 
  • unique selling propositions (USP). 

These brand values will attract your customers and franchisees and distinguish your network in the marketplace. To determine your USP or UVP, you may need to seek business consulting advice and conduct marketing research. Alternatively, you may have or need to develop exclusive product or service offerings that are unique to your franchise. These propositions will be a key sales point for attracting new franchisees and ensuring they pay the ongoing royalty fees. Your knowledge and understanding of your franchise network’s value proposition will ensure that customers and franchisees continue to be attracted to your brand.

Franchisee retention also contributes to the overall value of your brand. Franchisors should work hard to develop the goodwill and reputation of the brand trademarks, and marketing activities, that will benefit the franchisees. The more franchisees who have a positive experience as part of your franchise network, the more likely they are to recommend it to others and attract new franchisees to help your network grow. The positive attitude of franchisees will also reflect on customer satisfaction.

Key Takeaways

Before starting a franchise network, it is important that you obtain intellectual property rights in your branding and logos. Trademarks are a good way to protect your brand. Franchisees and customers will learn to associate your brand with these trademarks. You should give careful consideration when choosing your prospective franchisees to ensure they embody the values of your brand. You will need to determine and understand what your franchises’ value propositions are. If you have any questions on how to protect your franchise’s branding and goodwill, contact LegalVision’s franchise lawyers on 1300 544 755 or fill out the form on this page.

Frequently Asked Questions

Should franchisors have a franchisee selection process?

Yes, this is an important process that will assist in ensuring continuity and quality across the franchise network and will help to continue to build the brand.

What are value propositions?

Value propositions include your unique value propositions (UVP) and unique selling propositions (USP). These brand values help to form your brand identity. They also assist customers and franchisees in distinguishing your network in the marketplace.

Should I have a franchising training program? 

It is a good idea to have a training program to help franchisees’ deliver consistent and uniform services across the network. It also allows franchisees to learn about brand standards and develop their skills to best suit their business processes. 

Webinars

Construction Contract Essentials

Thursday 12 August | 11:00 - 11:45am

Online
Understand how construction contracts are drafted and how to protect your construction business.
Register Now

Startup 101: Understanding Cap Tables and ESOPs

Thursday 19 August | 11:00 - 11:45am

Online
Cap tables and employee share option plans are essential for fast-growing startups. Learn more with this free webinar.
Register Now

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.

The majority of our clients are LVConnect members. By becoming a member, you can stay ahead of legal issues while staying on top of costs. From just $119 per week, get all your contracts sorted, trade marks registered and questions answered by experienced business lawyers.

Learn more about LVConnect

Need Legal Help? Get a Free Fixed-Fee Quote

If you would like to receive a free fixed-fee quote or get in touch with our team, fill out the form below.

  • 2020 Excellence in Technology & Innovation – Finalist – Australasian Law Awards 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice – Winner – Australasian Lawyer 2020 Employer of Choice Winner – Australasian Lawyer
  • 2021 Fastest Growing Law Firm - Financial Times APAC 500 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year - Australasian Law Awards 2021 Law Firm of the Year - Australasian Law Awards
  • Most Innovative Law Firm - 2019 Australasian Lawyer 2019 Most Innovative Firm - Australasian Lawyer