Living Large: How to protect the brand
The topic was protecting the brand, which commonly means securing a company’s intellectual property. But Tom Lewison, CEO of Wild Wing Cafe, had a different take on his mind when reached Monday, October 5, in the aftermath of Hurricane Joaquin skirting South Carolina.
“It started raining at 11:30 on Thursday and has not stopped,” he said. “There were three dams that burst in Columbia.” Eight Wild Wing Cafe restaurants were closed between Friday and Sunday, in many cases to keep employees safe and off the roads. For the same reason company headquarters, in Mt. Pleasant, was closed Monday. Water quality was a question mark in Columbia on Monday, but Lewison expected that to be back on track later in the week.
“We’ll have some lost sales,” Lewison said about the restaurant closures, but he’s more concerned about the many employees whose homes were flooded. “We just want to take care of these poor people who’ve lost everything.” The franchise plans to hold fund-raising events to help.
It was a reminder for every company to be prepared, and Lewison himself has gone through formal crisis-management training and has put some of his management team through the paces, as well. “I guess it’s like the Boy Scouts. We hope for the best and prepare for the worst,” Lewison says.
“I guess it’s like the Boy Scouts. We hope for the best and prepare for the worst.”
Lewison then describes two other types of protection for his brand. “One way is copyrights,” he explains. “You have everything marked as much as you can.” He hires third-party attorneys to help with the task, to protect signage, recipes, trade dress, images and words used in marketing.
“It’s really not a very expensive process. So that’s good news, but it can take a lot of time up and you have to be careful because you could come up with something good in marketing and it could be taken” by someone else, he said. In his category, restaurants that serve chicken wings, it’s a bigger problem than in many others. “It’s a little bit of a challenge because there are so many concepts with similar names,” he said.
The final area of protection is food safety. “The brand can be damaged greatly, as Jack in the Box found out years ago, by serving unsafe food,” he said. A month ago Lewison added a new quality assurance department to the chain, charged with writing food safety guidelines and training staff at all restaurants.
So far he hasn’t had to terminate any contracts with franchisees who aren’t meeting brand standards, but he did have to do so at other systems. “We have some people who need to sharpen their game, but I haven’t put anyone into operational default,” he said. “There is no one who is going to win in that sort of circumstance.”
He thinks it’s important to walk a line between too strict and too lax, when enforcing brand standards. Some franchisors put a strict inspections protocol in place, “and it’s almost like franchise police out there making sure that everything is right. And they’re very inflexible,” Lewison says. “Other franchisors are very lax,” doing nothing as long as royalties are being paid.
“We’re somewhere right in the middle,” he says, and he figures that’s a good place to be.
“At the first hint of infringement you have to go through your attorneys. I know it’s an expensive proposition, but I don’t know any other way.”
The founders of Executive Care, husband-and-wife team Lenny Verkhoglaz and Mila Feldman, started years ago to protect their brand, long before they began to consider franchising. “We wanted to have an impact, and we wanted to have brand recognition,” recalls Lenny Verkhoglaz, CEO. “We didn’t want to call it L&M Homecare or Lenny and Mila Homecare,” because such a name wouldn’t have national appeal.
So they started with the basics: trademarking their logo and their tagline, and using attorneys to do searches to make sure they weren’t infringing on others.
Then the effort turned to policing. “You have to watch for competitors, so they do not adopt a similar concept, similar taglines, similar trademarks,” he said. But a franchisor must watch for internal competition, too, also known as “disgruntled franchisees that want to open something on the side.” That can be a particular burden for service providers, who may think they could just as easily go out on their own than continue to pay royalties once they gain expertise.
“When they come to us they know nothing about homecare, but when they sign on we open everything to them,” he said. “It does happen quite frequently, not only in our industry but in other industries. This is where you need to be very cognizant of what’s going on.”
Well-drafted franchise agreements and franchise disclosure documents, he said, are the best tools to guard against such events, and Executive Care uses the services of Justin Klein, Marks & Klein. “Utilizing sharp attorneys in the franchise arena and intellectual property arena is the best way of protecting yourself,” he said. “At the first hint of infringement you have to go through your attorneys. I know it’s an expensive proposition, but I don’t know any other way.”
“Our trademark and our logo, we go after people heavy on that because it’s so important.”
Verkhoglaz believes there are signs to watch for, such as franchisees becoming distant or not replying to requests. Although his system is still young and hasn’t had any defections yet, he is alert. “It could happen any time. You have to keep them close to you, in order to make sure that you satisfy their needs,” he said.
A vigorous defense
When Nancy Bigley joined Bottle & Bottega as CEO, the company was called Bottles & Brushes, but she thought the name was too generic. “I didn’t think we’d be able to trademark it and defend it,” she recalls.
So over a couple of months they worked to create a new name, which isn’t easy when wanting to grow a national brand. On one hand, the word “bottega” is unusual, and in fact means “a master artist’s studio,” so is spot-on for her art-making and wine-sipping franchise. On the other hand, everybody asks, “What the heck is a bottega?”
“We talked about this: Is it a bad thing that we have to define it?” Bigley says. “We decided to just make it part of our DNA,” including explaining what the word means on their studio windows. “I’m so happy we did. It’s certainly been tested, so we’ve been able to fight it a little bit more.”
What Bigley means is others have copied their name and trademarks—five times in the past five years, in fact—and her law firm, DLA Piper, has successfully made those copycats “cease and desist” without going to trial. She advises other franchisors to get top-notch intellectual property attorneys who are also experts in franchising. Although expensive, hiring a well-known firm in franchising also speaks volumes, she believes. In trademark disputes to date, she says, opposing counsel will look up her law firm and “know we’re not messing around,” she says.
Bigley also believes in picking her battles, because trying to fight every possible infringement is too expensive and likely unsuccessful. “Great ideas get copied. A lot of our ideas get copied, and you can’t defend everything,” she said. But doing what it takes to protect your name, logo and tagline is well worth it. “There are certain things you can defend. Our trademark and our logo, we go after people heavy on that because it’s so important,” she said.