Legacy brands are at the forefront of retail businesses in the U.S. They’re so commonplace in our lives that we probably don’t think much about it when we drive through a McDonald’s for a Big Mac, grab a coffee at Dunkin or a Blizzard at Dairy Queen. Those brands and that food have essentially built this country. But change is coming, and a new generation has some different ideas.
Simply put, legacy brands have been around for decades or longer and withstood the test of time. Historically, legacy brands were built as President Eisenhower signed into law the creation of the interstate highway system in 1956. The freeways tied America together. We became a more mobile nation. Families hit the roads experiencing new adventures, yet they longed for some of the comforts and familiarities of home. It was a novel idea. For the first time, customers looked for a similar experience at each location where they stopped, fueling the demand for the standardization offered by franchising.
Everyone appreciates a good story. The backstory of building a successful brand in the U.S. is about heritage. Early adopters of the franchise model embraced the concept, often growing and expanding within a single brand. They passed the reins to their children, who continued to grow store counts and expand a lucrative business model. The proof of the success of the business was that it adapted and changed with the times. Legacy brands essentially recreate and refresh themselves.
As the 21st century dawned, an interesting phenomenon began to emerge. Baby Boomers, who owned these multi-unit franchise concepts, gave birth to today’s millennial generation. These great-grandchildren of the early franchisees of legacy brands are now trading out these locations or adding new brands for multiple reasons.
For one, there has been a marked change in consumer demand. Customers now seek out brands based on an online presence rather than a recognizable storefront location (in the case of ghost kitchens). They no longer pursue brands based on what’s coming through television commercials and newspaper ads but instead what’s delivered directly to them through their smartphone.
Additionally, brand loyalty isn’t a given. This is a savvy consumer, and they demand good customer service. There’s tremendous competition, and consumers will abandon brands that don’t deliver.
Millennials who inherited a brand understand these concepts. That’s why they’re looking to create their own success.
Some want to divest themselves of what they view as dated concepts and reinvest in newer, fresher ideas. Innovation can keep a legacy brand relevant. Millennials understand that brands need to be real and relatable. This is a discerning consumer. They’re seeking meaning over price-point.
Others embrace socially conscious ideals and cultural awareness. With that in mind, they may want to disassociate from certain brands to embrace a greener path to operations, something their parents never considered. While Aunt Martha’s spaghetti sauce recipe on the menu is nostalgic, for example, consumers want to know if the tomatoes in the sauce were locally grown and organically harvested.
I’ve observed that many millennials studied and understand those socially driven principles. Many have likely spent more time in school than in the stores, a direct contrast to their parents and grandparents. They probably have less on-the-job training and more theoretical analysis. They might not be as emotionally connected to the locations and didn’t take the initial risk to build the units. It’s easier for them to put these stores on the market or trade for other concepts, even those less known or unproven, as they’ve only experienced the success built through these legacy brands.
It’s an interesting dichotomy. I’ve noticed that these millennials who have essentially been given a secure financial future in the family business are willing to take risks and make changes. They want to succeed or fail on their own. It’s reminiscent of their great-grandparents’ chutzpah in starting a business.
Changes in the landscape are creating challenges in the marketplace. While there are some legacy brand make-overs, the “this is the way we have always done things” mentality isn’t going to fly with this generation. This is fueling part of the demand to look beyond legacy brands for growth, perhaps putting the nostalgia at risk but opening opportunities for new, fresh and innovative options.
As legacy brands land in the hands of the latest generation, they find themselves at a crossroads. Do they introduce new thinking leading to innovation in these legacy concepts or do they sell in lieu of the newest brands on the block? Either way, this new 21st-century thinking will deliver a changed landscape for the legacy franchise restaurant model.