With the Chartered Professional Accountants of Canada...
The franchising industry in 2013 is adapting well to market shifts and technological developments. The economic downturn and the explosion of social media have all contributed to changes in the industry, and savvy franchisors have figured out ways to persevere. The business has changed in many ways, and over 2013 we’re seeing a number of things become more prevalent among franchise businesses. Here’s our break down of how the industry is shifting and switching things up to stay lean and mean.
It can be hard to find good franchisees, so some companies are teaming up with wealthy developers with a vested interest in their company. This can be an efficient relationship because the partner has deep pockets and can finance several locations. This allows the franchise rapid expansion.
It’s also becoming more common for franchisees to own multiple locations. A safe way to grow a franchise is by entrusting new locations to existing franchisees that already have a proven track record, and are fully trained in all aspects of the business.
In a large country like Canada, many companies have regional offices that find these area developers and multiple franchisees. It makes the search for qualified partners more local and allows companies to spread their brand to new parts of the country without a huge investment. Not only that, it brings them closer to their franchisees, spreads around some of the investment, and some of the risk.
Franchising is also becoming more adaptive. Many businesses now offer different location models with different investment levels. There could be anything from traditional store set ups, to small express-style stores, to large superstores. The flexible franchise options broaden the company’s appeal, increasing accessibility.
It’s not a one size fits all ordeal anymore. Depending on market size the franchise footprint, investment, and franchise fee can all be variable. These flexible franchise models allow companies to have different opportunities in different markets. Taco Time is a good example of this phenomenon. The Mexican fast food outlet offers three location styles: mall, stand alone/drive thru, and cantina.
It could be said that refranchising is the natural evolution of older businesses. Partners may want to leave the franchise for any number of reasons, and companies like M&M Meatshops and Pizza Hut have many refranchising opportunities available right now. Companies are putting forth efforts to make refranchising a more viable option for franchisees who are only interested in an existing location.
In the past, companies may have turned away applicants who are only interested in existing locations. Now when companies are recruiting and come across a great candidate that only wants an existing location, they keep those candidates on a list and present them with available stores that come up within their system.
Some potential franchisees prefer it this way because they don’t want to go through the whole start up procedure. They want the security of knowing they’re getting a location with an established track record they can count on.
Every company needs to have a great website to stay competitive today. People get most of their information over digital formats rather than print formats now, turning to Google and sites like www.betheboss.ca to find information rather than newspapers and magazines. Company websites need a steady supply of new content to boost brand awareness and inform their customers about what they’re doing, and what they’re offering.
Branded content is a new form of journalism that started taking off in 2012 and is now become widely used by many companies. Good brand content can do a lot for a company’s image, and keeping the stream going is essential to bringing attention to their business. It is like a hybrid between advertising and journalism in that it contains useful information about the brand packed in engaging stories that make the company look good.
Refranchising efforts, and the slow job market, are inspiring more people to go into business for themselves, and this means more people might start looking at franchises. This includes younger people in their 20s who are educated and saddled with a heavy debt loads, but are having trouble finding gainful employment. This young blood means new ideas, new vitality, and a new perspective which can be like a breath of fresh air to an old business.
For franchisors to attract more young and innovative partners, they have to embrace technology. The younger generation expects companies to be on the latest trends. Embracing technology means adapting social media marketing into the company portfolio. Trends move quickly, and if a business can’t keep up the younger generation will find someone that can.
Franchisors need to be aware of these changes in the digital space and stay on top of them. Savvy franchisors stay apprised of what’s going on and take a more proactive, rather than a reactive, approach to dealing with it. Franchises like Vera’s Burger Shack are starting to see the power of social media and are now learning how to harness that power and develop strategies that work. It’s also conceivable that there could be a new trend with using blogging and social media for recruitment purposes in the future.
As 2013 rolls on, we can expect to see these trends continue to alter the industry. As for what 2014 might look like, we’ll have to wait and see.