What Is a Brand Franchise?

A brand franchise is a contract franchise that authorizes brand use rights to franchisees. A way to allow franchisees to operate with franchised brands for a certain period of time and geographically. It allows franchisors and franchisees to share the benefits of the brand. Especially for franchisors. The brand can be developed during the brand's licensed use. Add value to your brand. This brand management method is a low-cost, low-risk brand extension. Because in the franchise mode. The franchisor can draw on the financial and human resources of the franchisee. Achieve brand extension. And that's why. Makes the brand franchise an effective way of brand extension. According to the statistics. At present, half of the total social retail sales in the United States are achieved through brand franchise. On average, one franchise store opens every 8 minutes. There are 558,000 franchise stores. Has penetrated into 75 industries and 4,800 companies. in England. There are currently 25,000 concessionaire companies. Up to £ 2.5 billion in direct capital expanded through franchise investments.

Brand franchise

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A brand franchise is a contract franchise that authorizes brand use rights to franchisees. A way to allow franchisees to operate with franchised brands for a certain period of time and geographically. It allows franchisors and franchisees to share the benefits of the brand. Especially for franchisors. The brand can be developed during the brand's licensed use. Add value to your brand. This brand management method is a low-cost, low-risk brand extension. Because in the franchise mode. The franchisor can draw on the financial and human resources of the franchisee. Achieve brand extension. And that's why. Makes the brand franchise an effective way of brand extension. According to the statistics. At present, half of the total social retail sales in the United States are achieved through brand franchise. On average, one franchise store opens every 8 minutes. There are 558,000 franchise stores. Has penetrated into 75 industries and 4,800 companies. in England. There are currently 25,000 concessionaire companies. Up to £ 2.5 billion in direct capital expanded through franchise investments.

Chinese name

Brand franchise

Foreign name

Brand franchise

Object

Brand

Types of

Modern words

Whether a brand can increase brand equity through franchising. Maintain and improve brand image. It is a matter of great concern to franchisors. It is related to whether a particular brand can be used by others in this way. Under normal circumstances. The franchisor will very carefully check whether the business philosophy of the company or individual who wants to use the brand meets the requirements: ^[1]

(1) Analysis of the influence of brand franchise on the development of franchised brands ^[2]

Brand management is the key link of brand operation, but also the key link of brand franchise. It can be said that brand management is the lifeline of brand franchise. Without reliable brand management, a brand franchise may die. Therefore, when companies adopt brand franchise, they must attach great importance to brand management. ^[2]

Franchising is known internationally as the third commercial revolution. It is a magic weapon for brand expansion. It has the characteristics of rapidly expanding business, occupying local markets, saving energy and capital. The franchise industry has developed rapidly in China in recent years. With the gradual cancellation of China's restrictions on the external retail service industry, franchising will enter China at a larger scale and speed, changing the way companies start up and expand. ^[3]

To do franchising, we need to establish a franchise chain system, which must have a strong support system, which is one of the cores of franchising. The licensee purchases not only the right to sell the goods and the right to use the trademark, but also the right to operate the entire business model. The franchisor must provide support and guidance to the licensee in the establishment and operation of the business. This requires a strong Strongly joined the headquarters, the franchisor has a strong organizational ability, to provide the licensee with operations, systems and marketing support to maintain the operation of the entire franchise system.

McDonald's has become one of the most successful franchise models in the world. It has more than 28,000 franchise stores worldwide, and more than 18 million people visit McDonald's every day. The success of the McDonald's franchise is inextricably linked to its support system.

I. Location selection and restaurant decoration support

McDonald's dominates the choice of hotel location. It is not a one-sided pursuit of the expansion of the number of outlets, but after a rigorous investigation, to give guidance and supervision to the licensee in the evaluation of the store location. McDonald's research shows that 70% of decisions to come to McDonald's may be impulse, so McDonald's chose a restaurant location as convenient as possible for customers. In the United States, in addition to establishing restaurants in traditional areas and suburbs, McDonald's also set up branches in food malls, hospitals, universities, and large shopping malls. Outside the United States, McDonald's first established McDonald's restaurants in central cities, and then opened free units of special services outside of central cities. In hotel buildings, standard hotel design is carried out, and equipment and materials are purchased through a global procurement system to reduce location selection costs and hotel construction costs. In the decoration of the hotel; McDonald's provided standard specifications to achieve uniform decoration.

System implementation and standardized management support

The core of franchising is to develop a set of scientifically designed, reasonable processes, efficient operations, standardized, and replicable systems. This system can be copied anywhere. McDonald's provides complete institutional support and standardized management support for franchise stores, as shown in the following aspects.

First, provide a standardized product line. The menu of each restaurant is basically the same, and "excellent quality, excellent service, cleanliness and authenticity." Improve the taste of products, attach great importance to the quality of food, and constantly improve the recipes and condiments. To ensure the stability of the food taste provided by each branch, so that the inherent particularity of the product is virtually fixed, and the customer's loyalty to its product is formed.

Second, formulate uniform service specifications. McDonald's fast food restaurant puts customers' thoughtful and convenient service first. All food is put in cartons or cups in advance, and customers only need to line up once to get what they need. McDonald's has opened many branches on both sides of the highway. When people drive by, they can report the required food to the communicator ten meters away from the store.

Third, formulate detailed procedures, rules, and regulations to regulate standardized operations. All branches around the world follow a standardized operation. For example, foods strictly implement the prescribed quality standards and operating procedures, carry out detailed action research on the work of making hamburgers, french fries, and cleaning the table to determine the best way to carry out the work, and then write down written regulations for Guide the behaviors of store managers and general employees.

Fourth, strict standards are implemented in terms of food quality, restaurant cleanliness, restaurant operation procedures, and friendly and courteous counter service. Its products, processing and cooking procedures and even the kitchen layout are standardized, with a stable, quality-assured supply chain system.

Because the distribution to chain stores is usually coordinated by the headquarters, the franchise organization must have a complete distribution system. McDonald's supply support system has the following features.

Adopting supply chain management, we never purchase any products or by-products. Instead of directly providing tableware and food ingredients to franchise stores, we play the role of managing all supply units, and professional suppliers deliver goods directly to each branch. The reason why McDonald's does not engage in distribution is that it must be backed by a strong logistics and capital flow for distribution, and it may also lead to internal disharmony.

McDonald's purchasing staff's guidelines are "food hygiene, safety, and constant availability." "Independence" is a very important criterion between McDonald's and suppliers, that is, McDonald's never "owns" any supplier in any form to avoid conflicts of interest that lead to non-objective positions and inability to focus on business. In the industry, these are the core of McDonald's "Supply Chain Management".

McDonald's uses "cooperation / partnership" to achieve reciprocity. In other words, McDonald's regards each supplier as a partner, instead of standardizing and restricting by signing a contract, but establishing a cooperative relationship with "partnership" to help the other party overcome difficulties and further achieve the goal of win-win and mutual benefit.

In terms of procurement, the headquarters has always adhered to the principle of profit sharing, that is, directly transferring the benefits obtained in the procurement to the franchised branches. This is an important way to enhance the solidarity of the licensees and strengthen the cooperation between the headquarters and the branches.

McDonald's headquarters does not make huge profits by selling equipment and products to licensees.

In order to reduce the "total cost", McDonald's considered from the perspective of supply chain management from the aspects of raw materials, distribution process, freight, and the timeliness of processing required by each center. Its beverages and bread come from the world's most famous beverage manufacturers and bread manufacturers. Chicken, french fries, ice cream, beef, etc. are provided by suppliers or local producers, which realizes 100% localization of supply, thereby saving costs.

Third, technical and equipment support

McDonald's uses standardized equipment and uses mechanized operations to ensure uniform product quality. At McDonald's, there are only waiters and no chefs, so chefs have been replaced by machinery. This greatly reduces human resources costs and labor intensity, ensures stable and uniform food quality, and greatly increases the speed of food production. Between McDonald's kitchen and the counter is a row of machines, including kitchen equipment such as beverage machines and ice cream machines, provided by specially designated companies. McDonald's continues to develop new production equipment and systems to increase the capacity of restaurants.

Fourth, staff training support

Franchising needs a unified model. The training system of franchising enterprises is very important, because the development speed of franchise stores depends to a large extent on the speed, efficiency and standardization of the training system.

McDonald's does not reduce expenses in terms of training employees. The training time for new employees is 15-30 days. New employees can also receive salary during the training period. Every store offers fair, non-discriminatory wages.

McDonald's also provides training for franchisees, managers and management assistants through the University of Hamburg. McDonald's began training courses at the University of Hamburg in 1961, with the aim of passing on McDonald's global business management experience. In October 1983, the facility was moved to Chicago, USA. The facilities of the University of Hamburg have also been able to accommodate only 9 to 12 students in the basement since the early days, and now have a classroom that can accommodate 200 students, an auditorium, and 6 function rooms. , 6 theater-style classrooms, 17 meeting rooms and a library. The school provides simultaneous interpretation systems in 20 languages in courses such as building market share, employee management, and maintaining market territory. In the past ten years, McDonald's has established the International Hamburg University in various regions. Currently, there are 7 universities in the world, which are located in Germany, Brazil, Australia, Japan, the United States, the United Kingdom, and Hong Kong. Each year, more than 5,000 students from all over the world come to the University of Hamburg. Participate in training courses, and more than 3,000 managers take advanced operations courses each year. Every year, 200 McDonald's managers from 72 countries who work for two to five years come here for two weeks of training. About 50,000 McDonald's employees, franchisees, and suppliers have received training diplomas from this university. The University of Hamburg is today able to train an MBA.

Five, information system support

The franchise organization headquarters must have a unique information network to ensure smooth and accurate information, maintain efficient and high-level leadership, and have the ability to provide regular guidance to member stores.

McDonald's stores across the country must not only report information to the headquarters, but also exchange information with each other to ensure reasonable and timely allocation of materials. McDonald's company can know the sales situation of each commodity in real time through management information systems, such as POS machines, and coordinate social logistics resources. McDonald's has deployed VPN equipment in logistics chain centers in China. It adopts NetScreen's unique centralized star VPN network design to achieve a full-mesh structure in Beijing, Guangzhou, Shanghai and other places, simplifying the configuration of remote office VPNs. McDonald's chose Corporate Yahoo! to establish a portal for it to solve its huge logistical management problem, that is, to provide employees, chain store owners and suppliers with access to information systems around the world. The company's goal is to make this portal a place for employees to do their daily work. McDonald's employees and suppliers in more than 120 countries will be able to access relevant data by logging on to web pages, and also help to include franchisees in the information circle. .

Support for advertising and public relations activities

McDonald's has built a unified brand network. McDonald's produces uniform advertising around the world and conducts large-scale media advertising with low cost.

McDonald's advertising film is full of wisdom in its simple and creative ideas. Children are often used as protagonists in advertising. McDonald's mascot is used to improve the brand's popularity among children. The name "Mike" is used to strengthen the connection between food on the menu and McDonald's. The advertising slogan is full of joy, such as "Bring laughter to others, but also bring more joy and success to yourself", "Only those who have not been to McDonald's, and no people who have not heard of McDonald's", etc. It attracted a lot of attention, conformed to the market strategy, and formed a great publicity offensive.

The storefront will always be the front of propaganda. McDonald's provides a certain percentage of bonuses to each franchise store based on the amount of customers' consumption in each restaurant, and conducts promotional activities in the store to improve McDonald's quality image, service image and global image through these measures.

Support for brand image and corporate culture

Franchising first franchise is a cultural model, which essentially realizes the rapid accumulation of wealth through the duplication of brand, business model and culture.

McDonald's industrialized production method has copied the taste, service and free and casual American culture of the world. McDonald's corporate identity has three major characteristics: first, the corporate philosophy is clear; second, corporate action and corporate philosophy are consistent; third, corporate appearance design is unified.

Hamburgers have always been the traditional daily food of Westerners, and the food sold by McDonald's has never changed surprisingly. Its longevity benefits from advanced marketing methods. Fast, fresh, clean, simple, consistent quality and taste, uniformly set prices for the target market, forming an affinity product image. McDonald's visual communication is also unique. The m-shaped cartoon logo on the red background and the funny Uncle McDonald's, these seemingly simple things have been cleverly conceived and publicized.

McDonald's corporate philosophy is Q, S, C + V, that is, quality, service, clean, value. High quality: McDonald's quality management is very strict. After food preparation exceeds a certain time limit, it is discarded and not sold. Services: Including the pleasantness of the store building, the setting of business hours, and the sales staff's service attitude. Maintain cleanliness and establish a good image of cleanliness; Value: conveys McDonald's philosophy of "providing more valuable high-quality goods to customers". McDonald's faithfully promotes its corporate philosophy and penetrates the entire real-world organization to launch specific corporate actions. The superiority of McDonald's corporate identification lies in the very thorough implementation of the corporate philosophy. In order to achieve this goal, McDonald's launched employee education and issued a fairly complete action manual.