Products and services are usually branded, but the brand itself can become a product. Brands can become so valuable that they are bought and sold just like donuts, shoes and pencils. Whenever a brand owner decides to allow other people to open new locations of an existing business — to open a franchise — he is leveraging the power of his brand and employing the labor of other people to increase the value of that brand.
Leveraging an existing brand to expand a company and enter new markets is nothing new, but the trend has accelerated in recent years and shows no sign of stopping. Anytime Fitness was founded in 2002 and, slightly more than a decade later, has opened more than 2,700 franchised locations. Bricks 4 Kidz, a unique startup offering classes and events that teach children how to design and build structures with Legos, opened in 2008 and already boasts 674 locations — but only two are company owned. These entrepreneurs invested in their brands and leveraged that investment to expand their businesses in just a few years.
But you don’t have to have a large, national presence to leverage the power of your brand. A much-loved restaurant known for romantic dinner service can open a smaller location right next door that serves lunch, coffee and pastry, extracting more value from the existing brand and a fully equipped kitchen. A local lawn care business with a large, satisfied customer base can recruit an arborist and a landscape architect and expand into full-service landscaping, leveraging the power of the existing brand. A high-end salon owner with a reputation for providing fashionable, cutting-edge cuts can open a new location near a university, offering more affordable services to a younger crowd. The power of the existing brand makes the success of these ventures more likely.
A brand is something you own, just like a piece of equipment or a building. The quality of your brand will either increase or decrease the bottom-line value of your business. If you take the time to craft a strong, positive brand it can be leveraged to generate significant profits. But, just like cheap equipment or a building always in need of repair, a negative brand will cost your company money and, quite possibly, kill the business.