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What do brand updates mean for franchise newcomers?

crop1By Diane Peters
The marketplace is always changing. Where consumers live, how they work, what they do in their leisure time, what they like—these things are constantly in flux, and successful businesses need to know how to keep pace.

Franchises have to keep up with what customers want and need, or run the risk of losing their relevance and fading away. That’s why restaurants are always adding new menu items and business services franchises are increasingly going digital.

However, sometimes, these small changes in products and services just aren’t enough. Even well established older brands sometimes have to take more drastic steps. Today, several familiar names are taking a leap by rebranding themselves or inventing a whole new concept to attract a different kind of customer.

These are risky ventures franchisors should undertake carefully. For franchisees, particularly those new to the industry, getting involved with a ‘freshened-up’ franchise has hazards. However, it also offers great opportunities and the chance at being part of the future of a brand, or even an industry.

Going downtown
One of the biggest current trends involves franchises opening downtown locations with customized concepts designed to appeal to urban customers. Finding homes in the cores of large cities such as Toronto, Vancouver and Montreal, these locations tend to leave a smaller footprint than traditional outlets and often sell an altered product line to cater to a younger, urban demographic.

This trend has been particularly noticeable in the food-service industry. Big-name companies—such as Tim Hortons, M&M Meat Shops and A&W Food Services of Canada—have been opening up downtown storefronts, which feature a compact kitchen (often borrowing plans from mall or kiosk concepts), modern décor and slightly altered menus to suit customer tastes and the kitchen’s capabilities.

ES A&WUrban Table front counterSimilarly, in 2007, McDonald’s Canada, launched what it called a ‘re-imaging program,’ which saw a redesign of more than 500 restaurants (both urban and suburban) with a more contemporary interior and exterior design, including flat-screen TVs, leather chairs, fireplaces and modern lighting fixtures, accented with materials such as natural stone, wood and brickwork.

For most of these companies, the downtown concept is the logical next step after saturating the suburban market.

“The reality is more and more people are living downtown. If we want to reach these customers, we need to make sure we’re meeting their needs,” says Rob Fussey, director of urban concept development for A&W, which has opened several downtown locations—some as small as 102-m2 (1,100 sf)—in Vancouver, Montreal and Toronto since last summer.

Fussey has been working on the idea for years, doing demographic research to create the concept. His findings meant the outlets offer a reduced menu, which also includes new items such as the Spicy Chicken Chipotle Sandwich (his studies found urban customers liked chicken). The stores also feature reusable dinnerware (customers in urban areas tend to be more environmentally conscious) and self-serve ordering kiosks.

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