How acquisitions in the retailing sector affect stakeholders: The special case of franchise acquisitions and their franchisees

Corporate branding has become a signal of a firm's overall positioning and as such, is an integral component of a firm's marketing communications. Industry consolidation has at the same time become the competitive option of choice in many industries. The increased merger and acquisition activity has given rise to unique branding challenges. Corporate re-branding is difficult when acquired and acquiring firms have equally recognizable brands. The re-branding challenge is exacerbated when one of the firms is a franchise, and franchisees choose whether to retain the original name or adopt the new. The individual choices can result in a portion of franchisees retaining the original franchise name while others adopt the new. The re-branding and strategic challenges facing a franchise operation are highlighted by focusing on the UPS experience after it purchased the Mail Boxes Etc. (MBE) franchise. The UPS/MBE case is used to illustrate that rebranding choices can affect a firm's various stakeholders differently, with particular emphasis given to the franchisees.