• Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint
Share this Page URL
Help

Chapter 9. The Dynamics of the Franchise... > Value of Trademark or Brand

Value of Trademark or Brand

The question of a franchise’s value rears its head in the discussion of relational dynamics in a different sense than it does when you are a prospective franchisor or franchisee first considering a franchise opportunity. From the relational dynamics perspective, the question of a franchise’s value is, Now that I am a party to this franchise relationship, what is the value of continuing to be so?—not, Should I do this at all?

That assessment to continue as a franchisee ultimately values the trademark or brand value that produces profits. How much it costs to exit the franchise relationship tells us a lot about how valuable the relationship is. There are always costs to exiting a business relationship. So, a franchisee says, “Am I unhappy enough to bear the expense of severing the relationship?” When franchisees see the trademark as able to grow and sustain value, they try to work through problems. However, if they see little value in the trademark at present or over time, then it’s fairly reasonable to contemplate leaving the system. There is evidence that if franchisees aren’t rewarded by the brand in the first 7 years of the relationship, then contemplation changes to action. It’s an interesting twist we call the “franchise seven-year itch.” As we soon discuss, one way to calculate the present and future value of your stake in the franchise is to determine your exit costs.


PREVIEW

                                                                          

Not a subscriber?

Start A Free Trial


  
  • Creative Edge
  • Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint