Franchise brand extensions can positively impact consumer perceptions of the original franchise brand, even despite previous negative impressions, according to new preliminary research findings from the Asia-Pacific Centre for Franchising Excellence.

What is a brand extension?

Some examples of franchise brand extensions include McCafe from McDonald’s and any one of the more than 30 extensions of the Jim’s home services franchise group (originating from Jim’s Mowing), including the new Jim’s Removals and Storage.

Franchise brand extensions research results

Lead researcher and Centre Deputy Director Associate Professor Scott Weaven said the research revealed franchise brand extensions enhanced original brand value in a number of cases.

“Our research reveals franchise brand extensions can act as independent perception ‘change agents’ that can assist in rejuvenating original franchise brands to existing and new consumer markets, regardless of original brand perceptions,” he said.

“Even in brand extensions far removed from the original franchise concept, interviewees perceived the extension as an indicator of the quality of the original brand.”

Consumer opinions of franchise brand extensions are based upon the physical attributes of the unit, staff quality and service, which are generally distinct from that of the original franchise brand.

The research also reveals franchise brand extensions are viewed as a significant commitment on the part of the franchise brand to develop separate businesses better equipped to adapting to changing needs in the marketplace

“In contrast, non-franchise extensions were viewed as a means for corporate brands to opportunistically capitalise on existing brand equity and utilise excess capacity in their networks,” Associate Professor Weaven said.

Tips for establishing a franchise brand extension

  • Franchise brand extensions seen as substitutes, complementary or having common production methods and expertise should be fostered.
  • Managers and franchising practitioners should de-emphasise the importance placed upon their original franchise brand when adopting a franchise brand extension.
  • If a franchise brand extension may be perceived as difficult to make, the management needs to ensure a significantly positive customer experience.

Associate Professor Weaven said franchisors have opportunities to alter original brand perceptions through the careful employment and management of brand extensions.

“If well executed and managed franchise brand extensions can provide positive brand associations with links to the original franchise brand,” he said.

“This may create a circular and positive brand development cycle, and could be a valid alternative and/or addition to re-branding in some circumstances.

“However, it’s important to note brand extensions are not a guaranteed method of positively affecting the original franchise brand value and so must be developed with careful consideration and appropriate allocation of resources.”

The research was conducted by Associate Professor Scott Weaven, Professor Debra Grace and Ryan Jones from the Griffith University.