NEW FRANCHISE TRENDS: DIGITAL TRANSFORMATION DRIVES FRANCHISING GAINS

Franchises will leverage digital tools to optimize operations, reduce costs and support franchisees with intuitive self-service portals for training, collaboration and insights. That means big changes are going to be coming throughout the 2024 and 2025 seasons – and all sorts of new technologies are also taking hold. From supply chain analytics to online ordering integrations, virtual onboarding and automated marketing, technology unlocks systemwide efficiencies not possible previously. Data usage in planning is also paramount. Let’s take a closer look at what’s happening in the space below.

Sustainable Brand Identities Resonating

Eco-conscious brands using sustainable materials, minimizing waste, supporting fair trade producers and implementing recycling programs will attract progressively minded millennials and Gen Z customers, employees plus investors at faster rates. Quantifying positive impact like carbon savings helps strengthen purpose-driven positioning. Sustainability permeates strategy from sourcing to buildouts now.

Differentiation Through Specialization

The marketplace will see a rise of micro-niche franchises concentrating expertise around specific products, services or customer segments. Focused differentiation builds reputation and referral networks in a segment faster while still leveraging franchisor resources on backend infrastructure. Specialist providers often command premium value. Various health and pet care franchises lead this trend.

Flexible Ownership Structures Widen Access

Barriers to franchise ownership will lower with new operation models like equity splits for multi-unit ownership, fractional franchising needing less capital, crowdfunded collaborations among local community members and online platforms helping secure financing. Reducing risk exposure expands accessibility for underrepresented groups like women or minority owners to run units profitably.

Virtual Kitchens Reshape Restaurants

Cloud or ghost kitchens will disrupt casual dining, optimizing delivery-only operations without dine-in overheads. Small footprint units maximize order volumes from a single kitchen. Opening multiple virtual restaurants in one kitchen also tests concepts easily. Franchisors save on real estate while data analytics inform location selection and menu optimization. The model holds strong pandemic-era growth potential.