Posted by Nguyen Ba Binh on 14.02.2011
by Andrew Terry
Shakespeare’s Juliet may have suggested that “a rose by any other name would smell as sweet” but brand managers who spend billions of dollars annually in the quest for brand loyalty would disagree. Words matter. Language matters. Frank Perdue, founder of one of the largest chicken producers in the US, was reminded of this when his slogan “it takes a strong man to make a tender chicken” was translated into Spanish as “it takes an aroused man to make a chicken affectionate”. This may be literally true but was not, presumably, the meaning he had in mind. Where is this going? Well, the editor has asked me to consider how the language we use in franchising creates impressions for prospective franchisees. An interesting topic. A prospective franchisee, like every other prospective consumer, is not immune to the seductive language in which opportunities are communicated.
The law, of course, has something to say about the impressions created by language. The misleading conduct action under section 52 of the Trade Practices Act is an effective constraint on language in advertisements and negotiations. Given the strength of the statutory prohibition, outright misrepresentation is relatively rare. More common is ‘puffery’ – grandiose, exaggerated and extravagant statements – and ‘weasel words’ which weaken statements or deprive them of real meaning. Both types of statements may or may not constitute misleading conduct and should be used by franchisors with caution and treated by prospective franchisees with care. Prospective franchisees need to look behind the glitter. The prosaic language of the disclosure document will be in stark contrast to the marketing blurb but is the franchisee’s best friend when it comes to assessing the opportunity.
Perhaps the most interesting examples of words creating an impression are found in language which lacks precision – the euphemisms and clichés which can mask reality. No franchising examples can match the use of terms such as ‘collateral damage’ or ‘ethnic cleansing’ to soften a more unpalatable reality but there are examples. For me, the most interesting is the use of language to describe the impact of a new outlet in an expanding franchise system on an existing outlet.
Franchisees and franchisors have developed their own, and very different, terminology. For franchisees this is ‘cannibalisation’. For franchisors this is ‘network expansion conflict’. The motional response is, of course, quite different.
Another example is the use of the term ‘commercial marriage’ to describe the franchisor/franchisee relationship. It suggests a closer and more intimate relationship than other commercial relationships. While this is undoubtedly true, the statistics on marriage breakdown suggest that the analogy may not be the most appropriate. Perhaps if prospective marriage partners had to issue disclosure documents to each other the success rate for marriage would approach that of franchising.
Another interesting use of language in franchising is substituting ‘franchise owner’ for ‘franchisee’. Some systems are passionate in their use of this term. It communicates to prospective franchisees that the relationship is not simply contractual and that the franchisee’s investment and proprietorship is acknowledged and respected.
But the terminology does not change the underlying legal reality. The franchise owner may be legally and financially independent and will own the business operated under the franchise, but never becomes the owner of the franchise. The franchise owner’s rights in relation to the franchise are simply to use the system for the period and on the terms specified in the contract.
My personal favourite is nevertheless the terminology adopted by Chooks, the West Australian-based quick service chicken franchise that has eschewed the traditional and often stuffy formalities of most corporate environments. Its head office is the Chooks Encouragement Centre and founder Steve Hansen has renounced the title of managing director in favour of Chief Chook. It will be interesting to read how the Chief Chook and his plump, juicy, tender chicken survive translation into Spanish.
Andrew Terry is Professor of Business Regulation and Chair of Discipline of Business Law in the Faculty of Economics and Business at the University of Sydney and consultant to DC Strategy. Contact email@example.com