More Restaurants Embark on Co-Branding Campaigns

by | 2 minute read

One way for niche restau­rant oper­a­tors to attract more traf­fic is to explore co-brand­ing with anoth­er restau­rant Restaurantthat has a com­ple­men­tary rather than com­pet­ing menu. A recent series of arti­cles in Fast Casual dis­cussed the pros and cons of these arrange­ments. While the arti­cle focused on well-known quick serve restau­rants, cobrand­ing could work with small local­ly owned estab­lish­ments as well.

Writ­ing for Fast Casu­al, Cher­ryh But­ler notes that the cobrand­ing trend seems to be grow­ing in the U.S. Cobrand­ing and co-locat­ing strate­gies allow a group of restau­rants to effec­tive­ly serve a larg­er group of con­sumers. For exam­ple, one per­son in a lunch par­ty may want to enjoy a bagel at lunch while anoth­er per­son can pick up their sal­ad at an adjoin­ing shop. Mul­ti­ple types of con­sumers can sat­is­fy their meal crav­ings and the restau­rants oper­a­tors score new sales with these arrange­ments.  Bruegger’s and Jam­ba Juice have opened co-brand­ed units. And, some ice cream shops are tak­ing the plunge by co-brand­ing with cof­fee shops.

Ana­lysts say the strat­e­gy works best when the logis­tics and mar­ket­ing plans are thought out well in advance. Cobrand­ing can also suc­ceed when oper­a­tors serve dif­fer­ent day parts. If one of the restau­rants typ­i­cal­ly draws a break­fast crowd and the oth­er draws a lunch or din­ner crowd, the own­ers get extend­ed use out of the phys­i­cal facil­i­ty. This strat­e­gy should also be explored when sea­son­al­i­ty is an issue.

With respect to mar­ket­ing, some oper­a­tors are care­ful to keep the funds in sep­a­rate pools and to pro­mote their brands sep­a­rate­ly. Unique iden­ti­ties are also main­tained in the restau­rants' phys­i­cal spaces. But oth­er oper­a­tors, espe­cial­ly if they own both brands, are min­gling mar­ket­ing funds. Each restau­rant may pro­mote dis­counts or coupons for the cobrand­ed partner’s prod­ucts.

What do you think of this arrange­ment? Will media com­pa­nies be able to gen­er­ate more rev­enue by try­ing to work a deal with two restau­rant oper­a­tors? Or will it be too com­pli­cat­ed for the mul­ti­ple par­ties to man­age?

Kathy Crosett
Kathy is the Vice Pres­i­dent of Research for Sales­Fu­el. She holds a Mas­ters in Busi­ness Admin­is­tra­tion from the Uni­ver­si­ty of Ver­mont and over­sees a staff of researchers, writ­ers and con­tent providers for Sales­Fu­el. Pre­vi­ous­ly, she was co-own­er of sev­er­al small busi­ness­es in the health care ser­vices sec­tor.