How Technology and Customers are Shaping the Franchise Model

HOW TECHNOLOGY AND CUSTOMERS ARE

Shaping the Franchise Model

If we apply advanced technology, improved customer access, and greater convenience to this industry, we find many new offerings.

By Rick Morgin

The franchise landscape is changing

quickly. New business opportunities are emerging within traditional industries, creating what we refer to as disruptions. This is good news for both sides of the franchise model. Companies ready for expansion can more easily consider franchising, and entrepreneurs eager to own a business can find a greater range of opportunities.

What is causing this shift, this disruption? Simply put it’s due to advances in science and technology. Advances in science and technology are allowing businesses to develop innovative new products, attract a greater number of customers, and provide increased convenience to those customers. What this means is traditional offerings are being broken

down into highly convenient and customized products and services consumers can purchase with the touch of a button.

The fitness industry is one example

where we see disruption and opportunity. If you think about traditional fitness service offerings, Big Box gyms come to mind.

If we apply advanced technology,

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improved customer access, and greater convenience to this industry, we find many new offerings. For example, specialized fitness concepts have developed a segment of the fitness industry known as boutique fitness. Specializing in a specific fitness category such as yoga, indoor cycling, rowing, or stretch and building a studio in an aesthetically pleasing, smaller, and more personable footprint, boutique fitness has grown 450% year over year since 2010. Boutique fitness concepts create an intimate and almost tribelike following. This loyal customer following develops because the franchises operating in this space empower their managers, trainers, and staff. This team utilizing technology creates the customer experience that consumers are looking for in new fitness concepts. Customers can use smartphones to access the app and schedule a workout based upon location and desired time frame.

When investigating the fitness industry, potential franchise candidates should find the company whose strengths give them an edge in this field. A company whose strengths are in real estate, labor, marketing and branding, and build-out has mastered the most difficult aspects of opening a franchise location. A dedicated team devoted to real estate who proactively searches for the right location with the right demographics will simplify this part of the process. A company whose track record is in attracting, empowering, and retaining thousands of their fitness instructors will benefit the franchisee in their system. Look for a company that

has the highest of brand standards, marketing

programs, and guidelines. What this means is that the company provides the bulk of the marketing programs, delivering the brand standardthat allows the franchiseeto focus on the customer experience. A brand or company that has a standard footprint has also figured out efficiencies in the build-out process; this reduces a franchisee's time to grand opening.

Other examples of change can be found in the beauty and fashion industry, where blow-dry bars, on-call stylists, and gown rentals are disrupting traditional salon and boutique businesses, bringing increased convenience to more customers. The automotive industry has fantastic business models that are industry disruptors and go beyond the maintenance and collision repair businesses.

It’s exciting to see this level of disruption across traditional industries. So many new opportunities are emerging

for both franchisors and franchisees. Additionally, just as we are seeing greater convenience for consumers, we are seeing greater flexibility for businesses. More aspiring entrepreneurs can enter the franchise market with varying levels of investment and commitment. w

Rick Morgin is a Consultant with The Franchise Consulting Company and alumnus of Santa Clara University. He assists clients with the educational process of researching and selecting available franchise businesses that best suit desired lifestyles and financial goals. The research, qualification, and application service he provides is free; fees are paid by the franchise company when a client opens their business. For more information, email rick@thefranchiseconsultingcompany .com, call/text (925) 324-6371, or visit www. thefranchise consultingcompany.com