Oct 26, 2022
The Future of Franchising in the U.S.

Franchising has been a tried and tested way for retailers to expand their footprint and brand visibility. The advent of the internet and internet-based technologies has however changed the way people shop and consume things. Today, everything from a book to a smartphone is delivered to your doorstep. Many people believe that brick-and-mortar retail outlets are dying a slow death. But that’s not true, online and retail co-exist, sure the way these businesses operate is evolving and technology is playing a big role. 

What one can’t take away from a well-established franchise business is its legacy and brand recognition. In fact, franchise businesses in the U.S. had a combined economic output of  $787.87 billion. What’s more, franchise businesses employ a whopping 8.91 million people. Franchisors who have been smart enough to leverage technology and integrate it in their business model have only grown bigger and more successful. McDonald’s is a living example of a franchise business model moving with time and using technology to maximize its sales, revenue, and profitability. Technology coupled with a rise in entrepreneurship has led to what many term as ‘franchising boom’. 

Partnering with technology is the future and the only way to survive and thrive for franchising businesses. 

Technologies that are transforming franchising for good

  • Remote store management apps: One of the biggest challenges during the pandemic was limited to no traveling. Even when the first round of global lockdown happened, essential services like food establishments were open. However, for a franchise business owner visiting multiple locations was still not a possibility. What they needed was a tool or an app which could enable them to stay connected with different stores, keep a close eye on day-to-day operations.  Apps such as Delightree help franchisors manage day-to-day operations across locations remotely, post updates and important announcements, share knowledge resources and much more on the app in real-time was what enabled franchise business owners to manage and run their franchise locations smoothly.
  • Online sessions: Another technology that franchise businesses especially those in the fitness space need to embrace is online sessions. In a digitally connected world and in a bid to maintain a healthy work-life balance more and more people want to engage in activities that give them the flexibility to do everything from home, even their gym or yoga sessions. Though people still prefer going to the gym for a workout session, there are many who prefer virtual and online sessions. Even education franchise businesses must leverage these capabilities and provide online learning sessions. 
  • Delivery apps: This is in particular applicable for food franchise businesses and also for brands that deal in wellness products. Customers prefer convenience above everything else and want everything delivered at their doorsteps. Even if you are a big food franchise such as McDonald’s having your own online food delivery app or getting yourself listed on a popular food delivery app such as GrubHub and UberEATS is a must. Partnering with delivery-centric apps can be a game-changer for any franchise business. One, it is a source for additional revenue. Second, people get to know about your outlet’s location.
  • Omni-channel marketing: You need to be visible online and make your presence felt. An average American spends 38 hours a week online checking emails, browsing websites, and surfing social media. The same report suggests that 31% of Americans are constantly online. You need to be seen across all online and offline channels. Embracing omni-channel marketing is the key to a successful franchise business.

Quick Service Restaurants (QSRs) still hold the largest share of the pie when it comes to franchising, however other industries are catching up fast. These are our top 3 picks where the franchising system is fast catching up.

Healthcare and Wellness

The pandemic changed our perspective towards life. Fitness, the focus on eating healthy, staying healthy, natural foods, yoga, meditation, and exercise were already on the rise. The pandemic further propelled the demand for these healthcare and wellness related products and services. Businesses that focus on a combination of health and wellness will continue to grow in 2022 and beyond. There is an unprecedented demand for a good gym, spa, yoga centres, Ayurveda products, and clean eating. If you have a business focusing on these areas coupled with the technology to have a seamless connection with your customers you could consider expanding your brand on a franchise business model.

Case study: Fit Body Boot Camp has been able to successfully establish itself as a leading gym using the franchising model. The fitness chain is a perfect example of combining technology with fair franchising terms. For example, the brand uses an advanced territory mapping software and presents the potential franchisor with the detailed demographics of their territory. They also provide omni-channel marketing support to their franchisors.

Learning and Development

The pandemic saw an unreal demand for online education portals. Home education and parent-teaching franchises have gained immense popularity over the last two years and will continue to be popular in 2022 and beyond. The shift from a traditional educational environment to a home-school environment will be significant enough to provide ample growth and profits for a plethora of learning and development-based franchises such as fitness tutoring, coding, online maths and science tuitions, and more.Tutoring franchises such as School is Easy are gaining popularity and offer both online and home-based franchise opportunity. Traditional educational institutes such as Lightbridge Academy, Tutor Doctor, The Tutoring center will continue to grow. Pandemic has made people realise the value of good education and the constant need of acquiring new skills and education to stay relevant. If you find the education industry attractive, then starting your franchise business journey in this industry is a good idea.

Food trucks and small scale food business

Mobile food-trucks are popular and reported good sales numbers even during the pandemic. If you are already serving sandwiches or pizza, churros, crepes, or any hot-food out of a van and are popular in your area, now is the time to take your food truck business  to the next level by launching a franchise. Even for someone looking at starting a food business, investing in getting a franchise of a popular food truck in your area makes sense as it requires low investments when compared to a brick and mortar format restaurant and subsequent overhead costs are also less.

The franchise business has a promising future!

2020 saw the ‘Great Resignation’ movement across industries. As we get back to a normal life there seems to be a tectonic shift in people’s priorities, values, ambitions, and the way they look towards life. Seasoned professionals are considering working for themselves rather than taking up a job and owning a franchise seems to be the perfect option. Why?

 Many industries could not cope up with the challenges the pandemic threw at them and are still struggling to find their ground. However, most franchising businesses are back on track thanks to their ability to innovate and embrace technology in a fast changing world. A whopping 85% of franchise businesses are a success after 5 years of commencing business, whereas 25% of independent businesses fail in the first five years. In the post-pandemic world, people are re-evaluating their future and embarking on their entrepreneurial journey in pursuit to earn more money, enjoying their freedom, and experiencing personal happiness. Franchising is the perfect opportunity for this new breed of entrepreneurs to fulfill their goals.

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