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This is part 7/7 of the series The Multiplier Model: Section 2: Foundations for Success.
The following excerpt is from franchise expert Mark Siebert's book The multiplier model. Buy now.
One of the first and most important tasks to consider when starting out a franchise business I'm choosing your name. The name represents you to your customers, and as such, it is not a decision to be taken lightly.
That said, names don't do business. Businesses make names.
While a good name choice may not be the cause of your successa bad one can definitely contribute until your deathso keep the following guidelines in mind.
Don't be too descriptive
From the point of view of obtaining a trademark (which will allow you to enforce your intellectual property rights), the more descriptive a name is, the more difficult it is to trademark.
The word “hamburger” – although it appears prominently in many signs – is not subject to it trademark protection. Imagine the amount of legal fees you'd rack up if you were fighting over the word “hamburger.”
A descriptive name can also lock your brand into a market position that you may not want to own at some point in the future. Boston chicken became Boston Market because the company wanted to promote other menu items like turkey and meatloaf. So choosing a descriptive name can hurt you when it comes time to expand.
If you absolutely must use a descriptor to help explain your consumer offering, use it in a tag, which may or may not be in trademark condition.
Make sure the name is easy to spell, pronounce and remember. The shortest names are easier to use in signageallowing you to use larger fonts and make the name more visible.
Related: The 4 biggest myths about franchising
Communicate positive attributes and values
Even if you avoid a descriptive name, one thing you can do is ask yourself which attributes you want to communicate for your brand. You can then incorporate a word or part of a word that helps convey that attribute.
FedExfor example, which was originally Federal Express, focused on the brand attribute of speed. PayPal focuses on friendship and make it easier by adding the “Pal” plugin.
logos
The process of developing a name and the logo can be complex. It may include steps such as:
- Derivation of the name using words or parts of words with specific characteristics
- Testing names and logos with focus groups
- Other tools used by consultants on issues such as color and design
When you first create your logodon't worry about spending a lot of money on design. There are a number of resources online that can design nice looking logos for one part of the cost of a professional design firm.
Related: 10 tips for going from employee to boss, from franchisees who did it
Make sure you can brand your name
Perhaps the most critical aspect of choosing a name is being confident about the name you choose may be trademarked before investing time or effort in promoting it. Burger King, for example, operates in Australia under the name Hungry Jack's due to a similar trademark problem.
In the US, a quick search of Electronic Trademark Search System (TESS) at the US Patent and Trademark Office (USPTO) website can tell you whether or not a name is trademarked.
Trademark notice
Although you can search TESS to see if your name is available, this method is not without flaws. If, for example, you searched for “MacDowell's” as a possible name your hamburger restaurantthe TESS search would come up empty—but USPTO can still reject your trademark if it thinks the similarity to McDonald's might confuse consumers.
On the other hand, the mere existence of a competing name may not even prevent you from obtaining a trademark. Trademarks are registered based on different classes in USPTO Classification System. There are a total of 45 different classes – 34 represent product classes and 11 represent service classes. So the fact that you have the same name as another trademark owner isn't necessarily a deal killer if you're in different classes. No one is likely to confuse an Ace bandage with Ace Hardware.
Related: Franchise Ownership Made Easy: Best Practices for Managing and Growing Your Business
Branding isn't always worth it
If you were operating as Joe's Pizza and thought you could trademark the name, you should consider whether that name is more trouble than it's worth. If you googled and found 10,000 different Joe's Pizza Parlors (or similar names), all those businesses would have prior rights to the name. So even if you could get the trademark, you'd have 10,000 businesses “infringing” on it – and legally, they'd have every right to continue operating under the trademark.
Seek advice from a counselor
Once you've narrowed down your list of possible names, it's imperative get trademark counsel information on your top choice before finalizing your decision. The cost of acquiring an undisputed brand, even when using a lawyer to file the documentsit is minimal when compared to the cost of rebranding your business at some point in the future.
Pro tip: When you decide to file for your trademark, do so at the federal level (not at the state level). This will give you the most extensive rights.
You've submitted… what next?
After you file, the USPTO will assign an examining attorney to review your grade. At that point, your application may be rejected (which you can appeal), or it may go through the publication process – where your application is listed in Official Gazette published weekly by the USPTO. If no one opposes your trademark within 30 days (and remember, trademark attorneys scan religiously Official Gazette on behalf of their clients), you go to the next step, and your trademark is registered.
If your grade is uncontested, the process can take six months to a year or more. But you can move forward during that time and start your business with your chosen name – as long as your trademark attorney feels comfortable that you are likely to get the trademark. After they have given permissionyou can begin to develop your look and feel—which will be communicated to the public through your logo.
