4th Industrial Revolution – Franchising adapts to a changing world

4th-industrial-revolution

The buzz word in global circles is ‘adaptability.’ With technology forging ahead at an unprecedented rate and talk of a 4th Revolution takes hold, adaptability has became the mantra as we end the decade and face the 2020’s.

It’s a known fact that when the world economy undergoes changes – either positive or negative – franchising is the first to act on those changes. As the one business sector with its ear close to the ground when it comes to picking up shifting consumer trends, it is also the one best suited, through its franchise systems, to effectively make the necessary changes to stay in the game, change the game or climb onto another bandwagon.

Whether a result of a need to inject some life into stagnant franchise brands or as a result of the new world order brought about by the recession, franchising is embracing alternative options in a big way – either by coming up with innovative areas to franchise or simply by allowing their franchisees more flexibility when it comes to adapting their existing brands to operate in ‘non-traditional’ venues to help with their bottom line.

Some of the steps franchisors have taken to counter-act the global recession and economic changes:

  • Develop smaller, more cost-effective franchise models with reduced franchise fees, lower start-up costs, fewer employees and reasonable rents.
  • Look at new, less expensive alternate locations beyond the shopping mall and strip mall to expand into such as stand-alone kiosks, corporate catering, campuses, sporting events, etc.
  • Investigate alternate markets for franchising to expand into. Whether it’s incorporating a brand into a complementary entity, as a pop-up or on-line option, finding new markets and new customers is key to success.
  • Operating in tandem with other non-competing brands is another way to expand the brand into new alternate markets using the support of other brands and their markets.
  • Looking at new business sectors where there is an appetite for franchising. This could be in the health sector, the education and child-care sector, the second hand market or in the DIY and home services markets.
  • Niche markets are offering one-of-a-kind franchises that give one the opportunity to get in on the ground floor of a new franchise trend. Whether it’s in offering a unique ‘gourmet’ food experience or whether it’s in the ‘green’ space of energy saving technology or the more environmental space of recycling, these are the new frontiers in franchising.
  • Multi-unit ownership has changed the face of franchising and is becoming more and more important in the franchising mix. In the USA more than half of all franchise units are run by multi-unit franchisees that own many stores and run their stores like a corporate business and are focused on long-term growth.
  • Multi-brand franchises have also become an acceptable trend. This refers to franchisees that opt to own two or more brands. Having proved to be successful operators these franchisees opt to diversify their investments, try out new concepts and take advantage of changing consumer trends.
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FASA Franchise Association South Africa

To protect, lobby, promote and develop ethical franchising across all sectors in South Africa with specific focus on transformation.
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