A franchisor's system standards can be the key to the brand's success: a franchise is like a team. It has an owner, a manager, a coach. But the players out on the field are the ones critical to whether the team wins or loses. (Legal).

Customers buy products and services they trust and know to be good, consistent, and high quality.

Customers will be loyal to a fast-food franchise chain they know has good burgers and fast, friendly service; to a hotel system they know is clean, service-oriented, and within their price range; to a salon with top-notch stylists. These attributes, although customers may not consciously identify them, go to the core of the franchise brand. To customers, a brand represents a franchise system's products or services, standards, and quality.

Each year, companies invest millions of dollars in building and marketing their brand and rightly so, a franchise system's brand is the fundamental key to its success. Customers who enjoy the products or services of a franchise outlet at home will expect the same quality when patronizing other system outlets while traveling. But if they don't receive that same quality of products or service, that customer's loyalty will be jeopardized.

One of the biggest mistakes a franchisor can make is not investing adequate time and energy within its franchisee network in developing, promoting, and maintaining the core components of its brand. A franchisor must establish quality standards for its brand and then convey those standards to its franchisees. Investing time up-front in brand development is critical to customer loyalty, system growth, and franchisee satisfaction and will also help in the prevention of legal headaches down the road.

Brand Development

A system-wide brand is the cornerstone of any franchise system. Its development should be a thoughtful, challenging and exciting process. The first, and perhaps most important, question a company should ask when developing its brand is: Who are we? Are we a hip, modern business catering to the under-40 crowd? Or are we a traditional, mature one focusing on families? Do we want to emphasize our quality of product or our fast and efficient service? This will provide the base for the rest of the brand message.

Once the basics of the brand are outlined, a franchise must clearly define the brand's corresponding system standards: its trademarks, trade dress, customer greeting, the look and feel of the business and other key items. These are things that differentiate a franchise system from its competitors. And, while the franchisor retains the ultimate control of these essential standards, it's important to get input and buy-in from the entire franchise network. For the brand to be successful, the franchisor must lead enthusiastically and with vision. The franchisor also must ensure that all members of the network believe in the brand message and are able to communicate its worth.

Communicating and enforcing system standards

The development of a franchise brand is a wasted exercise unless franchisees are consistently educated and trained on what the brand means and how it must be delivered to customers. When dealing with a wide network of franchisees, this can sometimes lead to problems if careful steps are not taken up front.

Brand standards should be outlined in writing in several mediums, including franchise brochures, training materials, operations manuals, system bulletins, and network communications. These should be accentuated with hands-on training, on-site visits, and at franchise conventions and meetings.

If a problem does arise, the focus should be on getting to the root of the problem. Brand standards must be uniformly enforced within the franchise network and at each franchise location. Enforcement must be consistent and objective. Penalties for breaching brand standards should be set forth in writing and clearly articulated in franchise agreements. In communicating any deficiencies, be specific in explaining what the breach is. Outline specific means of correcting the problem, and include a follow-up plan. If special circumstances arise, be sure to document these for later reference. Franchise systems should also have a plan for responding to resistance, including positive alternatives to default or termination.

A franchise is much like a team. Sure, it has an owner, a manager, a coach. But it's the players who are out on the field. They hit the home runs and are critical to whether the team wins or loses.

Brian Schnell is co-chair of the Franchise Practice Group at the Minneapolis law firm Gray Plant Mooty. He can be reached at 612-343-2982 or [e-mail].