Brand Dilution Effects on Franchises

Noelle Nelson, University of Minnesota, USA
Barbara Loken, University of Minnesota, USA
Christine Bennett, University of Minnesota, USA
Research on brand dilution has shown that extensions which are similar to the parent brand are better liked than dissimilar extensions. This research has focused on situations in which the parent brand has complete control over the extension. We examine dilution effects in the context of franchises. Franchisees make decisions for new stores that dilute the parent brand, even though the parent brand does not dictate the decisions. We show that new dissimilar franchise stores are negatively evaluated and negatively impact the parent brand. This effect occurs even occurs when participants are reminded that the company is a franchise.
[ to cite ]:
Noelle Nelson, Barbara Loken, and Christine Bennett (2009) ,"Brand Dilution Effects on Franchises", in NA - Advances in Consumer Research Volume 36, eds. Ann L. McGill and Sharon Shavitt, Duluth, MN : Association for Consumer Research, Pages: 951-951.