franchise chapter 7

1. CHAPTER 7 : CO-BRANDING
NAME OF MEMBERS :
FATIN NADZIRAH BTAHMAD ROSDI 62212215244
FILZAH AQILAH BINTIABD RAHIM 62212215230
AHMAD FAIZ BIN ABDUL RAZAK 62212215556
NUR AIN FARHANA BT AZIZ 62212215063
MIMI NURAZLEEN BT MAZLAN 62212215410
NORHANISMA BT ZURAIMI 62212215419
NAME OF LECTURER : DR. ROSNI BINTIAB WAHID
GROUP: ME30

2. CHAPTER OBJECTIVE
▪ LearnThe Importance Of Branding In Franchising
▪ UnderstandThe Nature Of Co-branding InThe Franchising Industry
▪ LearnThe Motivating Factors BehindThe Co-branding Phenomenon
▪ AppreciateThe Different Methods Of Co-branding
▪ RecognizeThe Importance Of Collaborating For Success

3. INTRODUCTION
▪ Co-branding
▪ Occurs when two brands are combined in a business offering
▪ Two or more franchisors combine forces to offer a franchisee the
opportunity to operate two or more franchises in one outlet.
▪ The use of multiple brand names together on a single product or
service
▪ There also called as dual branding, multi branding, cross-system
franchising & strategic alliance.
▪ Example : Stella McCartney & Adidas

4. BRANDING

5. A franchise system depends on its
uniqueness or brand equity.
 Some franchise system have experienced the halo effect, when the strong and well-known
brand links with a lesser known one and the second brand is lost in the halo of the first.
 For lesser known brands, co-branding may result in increased sales, but building brand
identification may not occur if partnered with a significantly larger company.
 From the foreign market, they suggests that consumer evaluations of the unknown brand from
one country were more positive when a brand ally was used.

6. Emergence of Co-Branding

7. PROS CONS

8. PROS CONS

9. CO-BRANDING METHODS

10. FROM THE FRANCHISOR’S PERSPECTIVE
The basic motivation to involve in partnering
activities is often a result of a firm’s evaluation
of its resources and expertise.

11. FROM THE FRANCHISOR’S PERSPECTIVE
RESOURCES
YES NO
EXPERIENCE
YES
Internal
development of
second brand
1
Sell its brand to
acquisitor
2
NO
Acquisition of
second brand
3
External
development of
second brand
4

12. FROM THE FRANCHISOR’S PERSPECTIVE
Q1 – If the franchisor does indeed feel that it can answer yes for both
question and does not desire to partner with another franchisor, then it will
develop the second brand internally.
Q2 –The franchisor has developed a brand with high equity but does not
have the internal resources that will enable it to pursue co-branding on its
own.
Q3 –The franchisor lacks the expertise to develop a second brand but does
not have the resources to either buy the entire system of a complementary
system or simply enter into a franchising agreement.
Q4 –The franchisor lack both the expertise and the resources to secure a
second brand.

13. FROM THE FRANCHISEE’S PERSPECTIVE
▪ The decision to open a co-branded unit has historically been a
franchisee-driven initiative.
▪ While a franchisee may develop an overall co-branding strategy that
implement consistently from unit to unit.
▪ The owner can also approach each unit in isolation by considering its
unique strengths and weakness , threats and opportunities.

14. Franchising consultant Mark Siebert recommends that
franchisees ask the following question when
considering co-branding :
▪ Do I get a competitive advantage?
▪ Do I need to co- brand for defensive reasons?
▪ Should I look for an exclusive relationship?

15. In addition, franchisees should follow an eight-step
process when evaluating and choosing a co-brand :
▪ Identify your positioning strategy for your local market
▪ Contact industry insiders to learn more about the nature of co-branding
▪ Define exactly what you want to do in terms of your co-branding partnership
▪ Meet with principles from the second brand , as well as your first brand
▪ Perform feasibility analysis to determine the potential returns on investment
▪ Make decision to co-brand or not to co-brand
▪ Negotiate contract with second franchise system
▪ Renegotiate contract with your first brand if necessary

16. FORMAT FOR SELECTION :
▪ Single Franchisee/ single Franchised Brand/Additional Non Franchised Brand
 occurs when a single franchisee obtains the rights to distribute a second brand or vice
versa
 Single Franchisee/Dual Franchised Brand
Occurs when a single franchisee obtains the right to franchise a second system
 Dual Franchisees/Dual Franchised Brands
Occurs when two local franchisees decide to coexist and build their store together
 Portfolio Management of multiple Brand
Occurs when a franchisee brings together numerous franchise systemto provide a
comprehensive and market-tailored opportunity at the retail level.

17. 7.5 Degree of Collaboration
▪ Only a few cases was co-branding being initiated from franchisor
level down specifically when a franchisor owned more than one
concept.
▪ Typical decision to co-brand was driven by franchisees wanting to get
involved on an individual basis.
▪ When a franchisor select a co-branding method that involves joint
marketing efforts across independent systems, collaboration on
franchise-related issues must occur

18. Continue..
▪ And also one essential thing is to choose a partner that is closely
related to the product or service that the company offering or the
partner is mature.

19. Continue..
▪ There are few reason why franchisor want to use co-branding
method
Expanding the number of customer.
Increase their sales income.
Reduce business risk.
▪ Co-branding may fail when there is a difference in vision and mission,
and even value of the two companies

20. Continue…
▪ Example of collaboration of co-branding company