Why Changing Your Company’s Name Can Be an Operational Nightmare

Hold on—didn’t Dunkin’ just do that, you ask? It did. Eleven months ago, the 68-year-old chain announced that Dunkin’ Donuts would be dropping the “Donuts” and becoming just Dunkin’. But Purcell had considered a virtually identical move 25 years ago. His in-house ad agency had suggested renaming the place Dunkin’s, a simple possessive that would allow for the easy promotion of various menu categories—Dunkin’s Sandwiches, Dunkin’s Coffee, and so on.

But that never happened. It wasn’t because there was anything wrong with a one-word name or because fellow executives didn’t like it. It never went down for one very specific reason.

“The operational issues—that’s what held us back,” Purcell said. “We just didn’t need those headaches.”

What sort of headaches? Well, the price tag, for one. A corporate name change is an expensive undertaking. But that was hardly his only concern. Purcell had just introduced a number of line extensions to the menu, including dark roast and Coolattas, and he was worried that a name change would be distracting. He had also worked very hard to repair the chain’s damaged relationship with franchisees. They had filed suit against corporate, and Purcell had helped settle it. With the hard feelings only recently mended, Purcell said, “the last thing you needed was to ask franchisees to change a sign. We couldn’t just go back at that point and ask them to shoulder [the costs.]” Ultimately, for these and other reasons, “we just put it on the back burner.”

Purcell’s experiences might be a quarter century old, but the hurdles associated with changing a company’s name—the ones he feared and plenty of others—are as relevant as ever. What’s more, they are items on the desks of many executives right now. The past couple of years have seen a multitude of companies, including many household names, take the ambitious step of changing what they’re called.

Why would a brand change its name?

In 2019, for example, Jamba Juice nixed the “Juice,” and Vacation Rentals by Owners became Vrbo. Last year, Weight Watchers became WW and Dunkin’ Donuts finally got to be just Dunkin’. Restoration Hardware abridged its name to RH in 2017, and Hewlett-Packard began going by HP in 2015.

In fact, name changing—most frequently, it amounts to name shortening—is a tactic pioneered by some of the world’s biggest brands, including Apple (which dropped the “Computer” from its name in 2007), Starbucks (which lost the “Coffee” in 2011) and FedEx, which was known as Federal Express until 2000.

The reasons why companies change their names are as numerous and varied as the companies themselves. Kentucky Fried Chicken became KFC in 1991 to avoid paying a licensing fee that the state of Kentucky had imposed on brands that wanted to use its name. Budget airline ValuJet became AirTran to distance itself from a 1997 crash that killed 110 people. During the internet boom of the late 1990s, some companies found that adding a dot-com to their names worked wonders for their stock prices (at least temporarily).

In more recent years, corporate name changes have had more to do with not getting pigeonholed into a single category—that’s why Jamba scuttled the Juice—or opting for shorter names because they’re much easier to recognize on handheld screens.

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