Value in the Franchise Brand

Published on
January 8, 2023

When you join a franchise, you agree to use its brand. This means you don't get to choose the design and style of your business and products, taking away some of your agency. But it has several substantial benefits. There is clear value in the franchise brand.

Customers Love Known Brands

While some customers seek out novelty and unique indie businesses, huge numbers also seek out known brands. They're convinced by the marketing, know what they're getting, and like it. So they're the target market for a franchised business, and they're a big market.

Using an established brand means many customers will come to you. Having a familiar logo and products means they know what they're getting. As a result, you have an instant customer base.

Established Quality

Designing the brand for your own business can be fun and satisfying. You get to pick the logo and color scheme, the layout and decoration of your premises, and the way your products look and feel. It's a creative opportunity.

But it's also a creative burden that's hard to get right. If you want to do it well, you'll need to pay at least one professional to work on your designs. In addition, you'll have to get feedback from potential customers and spend a lot of time evaluating competitors,  

Buying into an established brand saves you all that work and expense while ensuring you get good results. Established franchises have put the time and money into getting their brands right. They feature high-quality design work that's been extensively customer-tested to an extent you could never afford. Adopting the franchise brand gives you all of those advantages without the costs.

Resale Value

Sooner or later, you're going to want to sell your business. That might come after a lifetime of hard work and a heartfelt connection or after a few years once you've built up value and want to move on to the next project. Regardless, you'll want a business you can sell at a nice gain, generally a healthy multiple of annual net income.

An established franchise brand adds substantially to resale value. This is because buyers know what they're buying. They see the brand's value and the customers it will bring in. National reputation matters. That makes a sale both easier and more profitable.

When choosing, do consider the value in the franchise brand.  While not the only factor in your decision process, it is important.

This article was reprinted with permission by FranchiseChatter.

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