With some multiconcept operators purchasing a variety of chain restaurants, co-branding has gained new life. For those who may not be familiar with co-branding, on the surface it’s not a difficult concept: A company seeks to operate multiple brands from the same location. Execution, however, can be a little more challenging.

One co-branding effort that has received a lot of press lately is from GOTO Foods, which last year inked 33 development deals for co-branded units. FAT Brands is another multiconcept operator taking a run at co-branding. The company intends to integrate its Fatburger and Round Table Pizza concepts in one location. Dine Brands, the parent company of IHOP and Applebee’s, also ventured into the co-branding arena, as has WOWorks.

While this approach is generating some headlines now, the fact remains it’s not the first time the industry has seen companies seek to co-brand. Before we can look to the future of co-branding, taking a look back can help create some important context.

One of the better-known attempts at co-branding was the one Tricon Global Restaurants took in the 90s. At that time, Tricon owned Pizza Hut, Taco Bell and KFC, among other restaurant chains. Another example that comes to mind around this same time was the “Combo” and “Trombo” designs that Dunkin’ Brands Group developed using the three brands the company owned: Dunkin’ Donuts, Baskin Robins and Togo’s Sandwich Shop.

Thinking back on these examples, it’s easy to wonder why they did not spread faster. A few thoughts come to mind: one about design and one about menu offerings.

Let’s start with the back-of-house design. Co-branded operations where each brand has its own back-of-house space may struggle. Integrating the back of the house can really help a co-branded unit thrive because it introduces labor efficiencies and can help keep construction costs in check. In the case of the Tricon application, the kitchens were not as integrated as they could have been, resulting in a larger than necessary back-of-house. This was also similar to the Dunkin’s initiative.

The second thought concerns the menu offering and the daypart the menu strives to serve. This is where the approaches by Tricon and Dunkin’ differed significantly. Most of the menu items served at the Tricon co-branded units addressed the same daypart – mainly lunch. Tricon’s co-branded units even served smaller, personal pizzas more suitable for lunch via Pizza Hut Express. In contrast, Dunkin’s co-branded initiative had a breakfast offering via Dunkin’ Donuts, a lunch offering via Togo’s sandwiches, and a snack option via Baskin Robins.

A third piece to consider is that Tricon used brands that were well known on a national level while Dunkin’ used brands that were more regional at the time. In the end, Tricon’s approach suffered because the investment was too big and the demand for the product offering was limited to one daypart. Perhaps what made the Dunkin’ approach difficult to expand is the brands had lower annual unit volumes in terms of sales. From my recollection, their buildings were large as well.

When thinking about co-branding today, the concept of dark kitchens comes to mind. These are co-branding efforts, too, which often use concepts that are not as well known as others in the marketplace. A recent example of this is a project we did for a large dark kitchen, where we applied the latest systems in design tools to help the client better visualize the designs we were recommending.

Another extension of co-branding may include expansions in the menu, where a concept goes after a product category and/or daypart expansion with the new offering, under the existing brand name. Starbucks has done this very successfully by expanding the drinks it offers over the years. Such effort makes Starbucks a stronger player in the “grazing” period, while continuing its stronghold in the breakfast period and coffee break segments.

One can say that by offering Frapuccinos, Starbucks was pursuing the grazing period, which is somewhat true. By adding drinks such as its line of Refreshers, Starbucks has definitely expanded its ability to pursue this daypart; and this was all done within the same footprint. In some respects, Starbucks has co-branded itself within the same brand name by offering coffee in the morning and iced beverages during the grazing daypart.

As restaurants and other foodservice operators venture into co-branding, they should take into consideration several aspects of design that can increase the likelihood of success. These include:

• Integrate the kitchen and back-of-house areas, as well as streamline the front of the house. Doing so will help minimize the capital required and size of property needed.
• Combine concepts and menu offerings that maximize sales potential across different dayparts and customer bases.
• Leverage an omni-channel sales approach. In other words, make sure the product fits the use of the consumer with the packaging and portability across all modes of service.
• Develop a training program to ensure employees and managers are all up to speed on policies, procedures and more, so that they can consistently deliver the brand promise to the guests. The more variety the concept has, the more challenging this becomes.

To prove that this is not new, and that I have been around for a while (LOL), an article I wrote roughly 10 years ago provides some insights on how to optimize the likelihood of functional success when offering multi concepts. Many of the suggestions that I offered then are still appropriate today.

Co-branding can be very successful, as long as the concept design, along with the physical and brand attributes, are well thought-out. This requires a mindset of driving sales across different dayparts, minimizing the capital and operating costs and ensuring that the offering is operationally simple so that the employees can consistently execute without bottlenecks. This is how to drive the best unit economics for multibrand concepts.