The Future of Franchising in the U.S.

Franchising has long been a tested way for retailers to expand their footprint and brand visibility. The internet and internet-based technologies have changed how people shop and consume, and today everything from a book to a smartphone arrives at your doorstep. Many people believe brick-and-mortar retail is dying a slow death, but that is not the case. Online and physical retail coexist, and the way these businesses operate is evolving, with technology playing a large role.

What you cannot take away from a well-established franchise is its legacy and brand recognition. According to the International Franchise Association, franchise businesses in the U.S. generate hundreds of billions of dollars in combined economic output and employ millions of people. Franchisors who use technology and build it into their business model have grown bigger and more successful. McDonald's is a living example of a franchise model that moves with the times and uses technology to maximize sales, revenue, and profitability. Technology, paired with a rise in entrepreneurship, has led to what many call a franchising boom.

Partnering with technology is the future, and the way for franchise businesses to survive and thrive.

Technologies that are transforming franchising for good

• Remote store management apps: One of the biggest challenges during the pandemic was limited travel. Even during the first round of global lockdowns, essential services such as food establishments stayed open, but a franchise owner could not always visit multiple locations in person. What they needed was an app to stay connected with stores and keep a close eye on day-to-day operations. Apps such as Delightree help franchisors manage daily operations across locations remotely, post updates and announcements, and share knowledge resources in real time, which is what kept franchise locations running smoothly.
• Online sessions: Franchise businesses, especially those in the fitness space, can benefit from online sessions. In a digitally connected world, more people want the flexibility to do things from home, including gym and yoga sessions. Many still prefer working out at the gym, but a growing number want virtual options. Education franchises can also offer online learning sessions.
• Delivery apps: This applies to food franchises and to brands selling wellness products. Customers prefer convenience and want products delivered to their door. Even a large food franchise like McDonald's benefits from its own delivery app or a listing on a popular delivery service such as GrubHub or Uber Eats. Delivery partnerships create an additional source of revenue and help more people discover your location.
• Omni-channel marketing: You need to be visible online and make your presence felt. Customers spend a large share of their week online checking email, browsing websites, and using social media, so you need to be seen across online and offline channels. Embracing omni-channel marketing is central to a successful franchise.

Quick Service Restaurants (QSRs) still hold the largest share of franchising, but other industries are catching up fast. Here are our top three picks where the franchising model is gaining ground.

Healthcare and Wellness

The pandemic changed how many people view life. Fitness, eating well, natural foods, yoga, meditation, and exercise were already on the rise, and the pandemic further increased demand for these health and wellness products and services. Businesses focused on health and wellness will continue to grow in 2022 and beyond. There is strong demand for a good gym, spa, yoga center, Ayurveda products, and clean eating. If you run a business in these areas and have the technology to stay closely connected with your customers, you could consider expanding on a franchise model.

Fitness chains are a good example of combining technology with fair franchising terms. Some use territory mapping software to give a prospective franchisee detailed demographics of their territory, and they back franchisees with omni-channel marketing support.

Learning and Development

The pandemic created strong demand for online education. Home education and parent-teaching franchises have gained popularity over the past two years and will stay popular in 2022 and beyond. The shift from a traditional classroom to a home-school environment opens room for growth across learning and development franchises such as fitness tutoring, coding, and online math and science tutoring. Tutoring franchises that offer both online and home-based options are gaining popularity, and traditional educational institutes continue to grow. The pandemic made people value good education and the constant need to acquire new skills to stay relevant. If you find the education industry attractive, starting a franchise in this space is a sound idea.

Food trucks and small-scale food business

Mobile food trucks are popular and reported good sales even during the pandemic. If you already serve sandwiches, pizza, churros, crepes, or any hot food from a van and are popular in your area, now is the time to take your food truck to the next level by launching a franchise. For someone starting a food business, buying into a popular local food truck franchise makes sense, since it requires lower investment than a brick-and-mortar restaurant and carries lower overhead costs.

The franchise business has a promising future

2020 saw the Great Resignation across industries. As life returns to normal, there is a clear shift in people's priorities, values, and ambitions. Seasoned professionals are considering working for themselves rather than taking a job, and owning a franchise looks like a strong option. Why?

Many industries could not cope with the challenges the pandemic created and are still finding their footing. Most franchise businesses, however, are back on track thanks to their ability to innovate and adopt technology in a fast-changing world. In the post-pandemic world, people are re-evaluating their future and starting their entrepreneurial journey to earn more, enjoy their freedom, and find personal happiness. Franchising is a strong opportunity for this new wave of entrepreneurs to reach their goals.