The following excerpt is from franchise expert Mark Siebert’s book The Multiplier Model. Buy it now.
One of the first—and most important—tasks you’ll need to consider when starting a franchise business is choosing your name. The name represents you to your customers, and as such, it’s not a decision that should be made lightly.
That said, names don’t make businesses. Businesses make names.
Don’t be too descriptive
From the standpoint of obtaining a trademark (which will allow you to enforce your intellectual property rights), the more descriptive a name is, the harder it is to trademark.
The word “hamburgers”—while it appears prominently on many signs—is not subject to trademark protection. Imagine the amount of legal fees you’d collect if you were fighting over the word “hamburgers.”
A descriptive name could 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 need to use a descriptor to help explain your consumer offering, use it in a tagline, which you may or may not be able to trademark.
Make sure that the name is easy to spell, pronounce, and remember. Shorter names are easier to use on signage, allowing you to use larger letters and make the name more visible.
Communicate positive attributes and values
Even if you avoid a descriptive name, one thing you might do is ask yourself what attributes you want to communicate about your brand. You can then incorporate a word or part of a word that helps convey that attribute.
The process of developing a name and logo can be complex. It may include steps like:
- Name derivation 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 logo, don’t worry about spending a lot of money on design. There are a number of online resources that can designnice-looking logosfor a fraction of the cost of a professional design firm.
Make sure you can trademark your name
Perhaps the most critical aspect of choosing a name is being sure the name you choose can be trademarked before you invest any time or effort in promoting it. Burger King, for example, operates in Australia under the name Hungry Jack’s because of a similar trademark problem.
Caveats with trademarking
Even though you can search TESS to see if your name is available, this method is not without its flaws. If, for example, you searched “MacDowell’s” as a possible name for your hamburger restaurant, the TESS search would come up empty—but the USPTO might still reject your trademark if it felt the similarity to McDonald’s might confuse consumers.
On the flip side, the mere existence of a competing name may not preclude you from getting a trademark either. Trademarks are registered based on various classes in the USPTO’s classification system. There are a total of 45 different classes—34 representing product classes and 11 representing service classes. So the fact that you have the same name as another trademark owner is not necessarily a deal killer if you’re in different classes. No one is likely to confuse an Ace Bandage with Ace Hardware.
Trademarking is not always worth it
If you were operating as “Joe’s Pizza,” and you felt you could trademark the name, you should consider whether that name is more trouble than it is worth. If you searched Google 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 would have 10,000 businesses “infringing” on it—and legally, they would have every right to continue to operate under the brand.
Seek advice from counsel
Once you have narrowed down your list of potential names, it’s imperative to get the input of trademark counsel on your top choice before you finalize your decision. The cost of obtaining an uncontested trademark, even when using an attorney to file the paperwork, is minimal when compared to the cost of having to rebrand your business at some point in the future.
Pro tip: When deciding to file your trademark, do so at the federal level (not the state level). That will give you the broadest rights.
You’ve filed… what next?
Once you file, the USPTO will assign an examining attorney to review your mark. At that point, your application could be rejected (which you can appeal), or it can move through the process of publication—where your application is listed in the Official Gazette published weekly by the USPTO. If no one objects to your mark within 30 days (and remember, trademark attorneys religiously scan the Official Gazette on behalf of their clients), you go to the next step, and your trademark is registered.
If your mark is uncontested, the process can take six months to a year or more. But you can go ahead during that time and start your business under your chosen name—as long as your trademark attorney feels comfortable that you’re likely to obtain the mark. Once they’ve given you the go-ahead, you can begin developing your look and feel—which will be communicated to the public through your logo.
Related: Considering franchise ownership? Get started now and take this quiz to find your personalized list of franchises that match your lifestyle, interests and budget.
Get started with The Multiplier Model
Going from small business to successful startup to scalable growth takes more than just good luck. It takes a system. Over the last 34 years, franchising consultant and growth expert Mark Siebert has been sought out by more than 70,000 executives looking to expand their companies. Out of those 70,000, only 5,000 had the right systems in place to go from successful to scalable. In The Multiplier Model, Siebert discusses the factors that determine if an entrepreneur is ready to scale their venture — and the best ways to get started. Read more.