The franchise MULO (multi-location) business model has been around since 1731 and boomed in the U.S. in 1960, with the formation of the International Franchise Association (or IFA).
The IFA now represents 1,300 franchisors, 10,000 franchisees, and more than 600 professionals and suppliers to the industry, according to its website (which also features a robust history of franchises, for those of you who like to understand the past before leaping into the present and future).
Part of that present is the IFA Annual Convention, which is attended by thought leaders, franchisors and franchisees, and government and community leaders.
Mark Michael, the CEO of DevHub.com, attended the 2024 Convention and gave us his perspective on the trends that will impact the industry. They include:
- The rise of AI and machine learning to provide physical services, increase productivity, and optimize marketing. This may be especially critical to franchisees who are choosing to invest in expansion and determine growth potential within specific markets.
- As in all MULO businesses, marketing data and predictive analytics (often utilizing AI and ML) can help attract customers and track and optimize the experience of all customers. We’re already seeing examples of brands recommending products to customers in-store or at drive-thrus, based on previous behaviors and preferences.
- The role of the website has evolved. A franchise website is no longer just a digital directory but now a growth engine that enables the business to expand, get real-time consumer insights, engage with prospects and customers, and provide better and more personalized service.
- Corporate and social responsibility has become a critical way for these businesses to connect with the communities they serve. Brands and companies “transcend selling,” says Michael. “They are now more invested in showing who they are and what they stand for.” (We covered one example of this in an article about the Fat Brands Foundation.)
- Franchisors must keep up with the latest advances in technology. “If you fall behind, so will your revenue,” Michael warns. Franchisees and stakeholders need to understand the “why” behind the adoption of new technologies and see specific outcomes of how automation can impact a franchisee’s day-to-day operations and marketing.
We’ve often discussed the need for allowing franchisees to provide unique experiences and messaging in the markets they serve. Empowering individual store owners and regional managers to use data and their human knowledge to better serve the communities in which they’re based is still critically important.
What ones are BOOMing today? Although these brands are the largest in the world, franchisors and franchisees alike need to also keep a finger on the pulse of consumer and business trends. From home services to tutoring to hair care to elder care, the possibilities are seemingly endless.
But whether you’re investing in selling milkshakes or tax prep, knowing as much as you can about franchise operations and marketing is more critical than ever. Thank you, Mark Michael for being our “feet on the street” of what lies ahead.
