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Benefits Of Co-Branding

A franchisor explains why companies are putting two brands under the same roof.

Driving the streets of any city, it's hard to ignore co-branding's enormous presence. McDonald's locations exist within Wal-Marts. Baskin-Robbins, Dunkin' Donuts and Togos live happily under one roof.

Where does the idea to co-brand come from? Why are more franchises doing it?

For Yorkshire Global Restaurants, the franchisor of A&W and Long John Silver's restaurants, the idea came about three years ago, when a KFC franchisee in Butte, Montana, approached the company about co-branding his location with A&W. The pairing was so successful that last spring KFC and A&W announced plans to open 300 co-branded restaurants over the next five years. Yorkshire also co-brands A&W with its own Long John Silver's.

To learn more about the whys and hows of co-branding, we spoke with Sid Feltenstein, CEO of Yorkshire, and discovered what makes these pairings such an appetizing proposition.

Franchise Zone:Why did you decide to co-brand A&W with KFC?

Sid Feltenstein: We thought it was a good complement-KFC is more dinner, we're more lunch, so it would extend KFC's day part. The hamburger category is a category they wanted to be in, and they wanted to do it with a branded concept like ours, so it made sense from that viewpoint. And it's worked out very well.

Why did you decide to co-brand Long John Silver's and A&W?

For a lot of the same reasons. We felt A&W would be a great addition to Long John Silver's and would give it a brand within a category where consumption patterns generate higher visit frequency, and they were complementary day parts.

What do you consider to be the benefits of co-branding?

Basically, you can generate a significant increase in sales, and a lot of those increased sales can flow to the bottom line if you're able to bring a customer in more often or appeal to more customers by having two well-known brands under one roof. You're expanding the potential customer base you can attract.

What were the initial steps to get this off the gound? How did the idea come up?

It varies. When we bought Long John Silver's, it was with that idea in mind. We knew what we wanted to do, and since we owned the company, we could just go ahead and do it. Today we're approached all the time by companies that want to co-brand with both A&W and Long John Silver's. They've proven to be very valuable co-branded partners.

What is it about your brands that make them so desirable?

They're well-known brands. A&W is in the hamburger category, where 50 cents of every quick-service dollar is spent, and has tremendous brand awareness and tremendous brand equity. But on the other hand, we don't have the large penetration, the large store numbers that other players have, so people can develop a program with us and have all the advantages of a large brand.

Long John Silver's is a great dinner concept, a great concept that dominates its category. And it's a popular product-fish consumption is growing. People see us as a very valued partner due to those reasons.

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