Content by: Natasha Mohunlal – Managing Director Natasha Mohunlal & Associates IP Attorneys
- B. Soc.Sci – University of Natal
- Post Graduate Certificate (Education) – University of Natal
- LLB – University of South Africa
- Attorney of the High Court of South Africa
- Member of the Legal Practice Council (LPC)
- BNI Member
It is commonly said that “imitation is the sincerest form of flattery”. However, in the franchise
business, imitation may prove disastrous to the company being imitated.
A franchise may be defined as a process whereby a franchisor gives a franchisee a license
empowering the franchisee to use the franchisor’s business name, trademark, model, and services.
In other words, a joint venture is created between the franchisor and the franchisee. In competitive
industries like the clothing industry, it may be better to acquire a franchise having an established
and proven business model than starting a new company. The South African industry, especially
fast-food, is dominated by franchises.
The biggest advantage that a franchise confers is brand recognition. Brand recognition plays an
import role in the success of a franchise. A brand can be considered as a company’s greatest asset
because it plays a major role in how consumers remember the company. Most people can easily
identify a brand by looking at their logo. For example, if you see an accentuated letter M in yellow
colour, McDonald’s immediately comes to mind or if I say “it’s finger-licking good”, you immediately
think of KFC.
Generally, consumers consider products from good brands to be of better quality and this eases
the consumer’s decision-making process. The average consumer would take a product from a
supermarket shelf without any scrutiny simply because the product is branded by a company with
good reputation.