McCafe: The McDonald's Co-branding Experience

Abstract

This paper explores the use of co-branding in franchising as a strategy to stimulate and rejuvenate growth in a mature franchising sector. It is proposed that development trends such as multiple unit franchising, mobile franchising and co-branding, occur because of the sector's need to find new means of expansion beyond the standard model of franchising. The specific phenomenon of co-branding is examined in the form of a case study. The McDonald's/McCafe co-branded arrangement, which evolved in Australia, is analysed to determine the incentives and benefits associated with this successful co-branding initiative. A tentative theoretical model has been formulated giving rise to a complex structure of motivational facets that are intrinsically linked and appear to work synergistically to achieve a co-branded arrangement.