Like with any business venture there are benefits, considerations and draw backs, but when done correctly co-branding offers fantastic benefits for both the business (financially and brand wise) and the customer (convenience and trust).
There are the obvious cost savings like shop rental, building maintenance fees and staff wages, but partnering up with an reputable brand also allows your brand to piggy back on the other brands marketing, location and established customer base.
The best piece of advice when considering co-branding your brand/store or entering a joint agreement is to ensure that you are doing so with established and more valued brands. Never link your brand with one that does not have the same values or business direction, no matter how large or more established the other brand is.
For example Best & Less is a great discount brand but you would not want to go into a JV with them unless you were also offering discounts and low level products. It would ultimately damage your brand in the long term and devalue your current offering.
For Cold Rock, using a Cold Rock Express model and going into Video Ezy stores makes complete sense. The customer base is similar and so are the brand values. The products are complimentary and with the decline in DVD rentals, it gives the customer an added reason to visit the store rather than watch online.
From the Cold Rock perspective we are going into locations that already have foot traffic, ultimately any customer who walks into the store is a potential customer for our brand. We already have a head start, being able to tap into an established customer base.
This particular co-branding also benefits existing franchisees of Video Ezy, as with increasing costs but decreasing revenue, it allows the franchisee to share overheads and staff costs across a new revenue stream. And the investment is small! The model also means franchisees can take advantage of the Cold Rock marketing department, on a local level.
However there are always considerations to make before jumping into business with another brand.
You want to ensure both brands are trying to attract the same type of customer to take advantage of the co-brand. If not you will lose the advantage of each others marketing and customer base.
We are lucky with Cold Rock; it being a dessert brand, we are very versatile, meaning we can co-brand with a wide range of brands such as entertainment outlets (video rental stores, theme parks, cinemas etc.) and food retail, providing the dessert option to their main course.
We have co-branded with both Video Ezy and Souvlaki Hut which has created a one-stop destination for our customers. This is a fantastic benefit for customers who don’t want the hassle of stopping at multiple stores.
This co-branding is already working in our sector, with Cold Stone in the USA co-branding with Tim Hortons (a Canadian coffee and sandwich system).
Taking Co-branding and diversifying the concept slightly, the UK supermarkets are waging war on all sectors, white labeling everything from currency to gold buying to opticians to car insurance to party planning.
They are creating a one-stop destination for their consumers without the need to co-brand but with the benefits of choosing the best companies in each sector to service their existing customers. They are taking the risk out of diversifying and taking the benefits of co-branding to the next level.
It is a great growth tool for both parties.
Stan Gordon is the CEO of Franchised Food Company