AI in franchising - The good, the bad and the ugly

Data is one of the most powerful tools available to franchises. It can help them to attract new franchisees and customers, target their marketing efforts, tailor their strategies and attract investment. However, data-driven decision-making can come at a price, and it is essential that artificial intelligence (AI) is used with care as the potential for problems increases exponentially when the technology is not used optimally.

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AI - The good

AI can collect data from numerous sources and analyze it more quickly than a human can. This means that franchises can streamline their data collection processes and quickly obtain usable information to inform their next recruitment campaign, marketing manifesto or investment appraisal.

AI recognizes trends in data and can predict with a high likelihood of success what the outcome of a particular approach is likely to be, helping businesses to progress ambitious growth plans and maximize their profitability.

When data is collected and used correctly, it gives franchisors an excellent degree of insight into the demographics and preferences of their target audience, allowing them to tailor their approach and increase their lead conversion rates.

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AI - The bad

There are two fundamental drawbacks of using AI. The first is the risk of collecting inaccurate data or it making incorrect assumptions, as was the case in the lawsuit of Moffatt vs Air Canada in which the airline's chatbot promised a discount that the airline could not uphold (https://www.bbc.com/travel/article/20240222-air-canada-chatbot-misinformation-what-travellers-should-know). It is vital that businesses understand the extent to which they are trusting AI and always fact-check the data it collects prior to relying on it.

In addition, as much as the data collected may be of value to your business, keep in mind that the company that owns the AI technology benefits to an even greater extent, bolstering their revenue, increasing the knowledge base of their technology, and building up a strong picture of the requesting organization.

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AI - The ugly

Finally, AI poses an immense risk in terms of misinformation, as new research shows that AI-generated misinformation is almost as common as text and general content manipulation. This means that it can be hard to trust the data that is harvested using the technology, and that anyone could indeed push misinformation pertaining to your business, harming its reputation and profitability.

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While franchises may see the benefit of using generative AI to increase productivity, they must always be cognizant of the fact that bad actors may also use the same technology to create misinformation pertaining to their brand and implement appropriate plans to monitor, mitigate and respond to any potential threats that may arise as a result.