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With the Chartered Professional Accountants of Canada (CPA Canada) reporting today that inflation and the supply chain are the top two challenges to the growth of the Canadian economy, you may be wondering what effect this will have on franchises and franchisees.
A lot will depend on the type of franchise that you are part of. Those that rely on the delivery of services and on demonstrating and sharing skills (for example, those related to sporting, consulting and cleaning) are less likely to be affected than those that depend on buying and selling physical goods.
Should you be worried?
For those who are part of a goods franchise, it would be worthwhile having the conversation with your mentors or suppliers to find out whether any goods shortages or price rises are expected so you can share this information with your customers.
The biggest issue related to the supply chain appears to be the ongoing war in Ukraine, which is affecting the supply of many goods such as precious metals, wheat, fertilizer, oil and gas. If your franchise relies entirely on the manufacture and distribution of goods that do not require input from Europe, your supply chain may remain more stable.
What action should you take?
Customers generally remain committed to brands that they like and trust and will continue to support your business as long as you are up front and honest with them, letting them know in advance about any expected shortages or price rises.
Franchisees should also look to garner public favor by focusing on delivering sustainable solutions to reduce emissions and support the transition to a strong, low-carbon economy. This may mean taking action such as reducing or changing packaging to be more easily recycled, composted or re-used; using more economical forms of delivery where possible; and selling goods in your local area, perhaps at trade fairs or during home demonstrations. Selling in this way not only builds your profile and gets you known in your local area but also offers the opportunity for customers to buy your products directly from you with no shipping costs.
If you have a social media profile for your franchise, this is a good place to communicate and engage with your customers. Mailing lists are also helpful. If you have a regular client base, make sure they are kept informed as your loyal customers are hugely important and wish to feel valued.