Intangible Assets Really Count In Franchise Brand, Integrity, and Reputation!

Michael D. Moberly     February 24, 2009

The intent of this ‘analysis and commentary’ is to encourage franchisors (franchise systems) to consider a slight shift from being exclusively (solely) market – margin driven to being aggressively protective of their product/service’ intellectual property, proprietary competitive advantages, brand, and reputation.  A franchises’ brand, of course, is the key product name and reputation that’s recognized in the marketplace.

A (franchise) brand integrity program should include processes, features, designs, and (business) practices that collectively ensure (monitor) the on-going integrity, safety, and authenticity (e.g., consumer confidence) of its products, intellectual property, competitive advantages, reputation, image, and shareholder value.

In this context, franchisors’ should consider (a.) how much risk to product/service IP, intangible assets, brand integrity, and reputation, etc., exist in the franchises’ market space, and (b.) has each (franchise) product/service and the associated intellectual property and proprietary competitive advantages been identified, valued and practices put in place to sustain control, use, ownership, and value of those assets…?

The Seven Laws of Brand Integrity and Reputation For Franchise Systems…
1.  Brand integrity and reputation involves more than mere legal protections afforded through conventional intellectual property laws…

2.  If a franchises’ product-service (brand, reputation) is valuable, be assured there are a broad range of global economic – competitive advantage adversaries that will try to appropriate those assets and take the profits…

3.  If a franchisor does not take proactive steps to safeguard their intangible assets, e.g., intellectual property, brand, reputation, proprietary competitive advantages, etc., related to its products and services, no one will do it for them

4.  If a franchisor waits to develop and execute a brand integrity program after one or more of its products/services have been attacked, value eroded, reputation (consumer confidence) diminished, etc., its likely the franchisor will lose…

5.  If a franchisor effectively and consistently executes a plan (practices) to safeguard its brand, intellectual property, proprietary competitive advantages, and reputation, its likely the economic – competitive advantage adversary’s will target competitors, not you…

6.  If a franchisor permits ‘different prices in different markets’ (for products, services), be assured, someone already has, and will continue to ‘steal your profits’…

7.  A franchisors’ own products/services, in the form of gray market goods and counterfeits, are often its biggest, most active, and consistent competitor

Remember, protection (e.g., sustain control, use, ownership, and value) of each product/service that a franchise delivers (produces, owns, etc.) is as important, as the promotional costs – resources used to market it!

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