Economic uncertainty for businessmen is nothing new, but the franchise system has been created in a unique way to soften cost pressure, prices and inflation. Taking advantage of the scale economies, by innovating the supply chain and maintaining strong lines of communication, franchises can give franchisees a competitive advantage that often reduces independent operators.
To find out that franchisers are shielding and protecting them at these tumultuous economic hours, Businessman Talking to Chicago -based communications and content marketing agency, Chief Growth Officer of Mainland, spoke with 20 -year -old industry veteran Nick Paulus. He explains why franchising is naturally flexible, what smart franchises are doing to reduce costs and where the model still needs to improve.
Answers of length and explanation. Amendments have been made.
Related: Considering the ownership of the franchise? Start now to find a list of your personal nature of your lifestyle, interests and budget franchises.
What about this franchising model that makes it flexible with an economic shock?
It has several pieces. On the franchise growth, the turmoil is actually interested in buying the franchise. Many times, when someone buys, this is because they have experienced a career turmoil – like being discharged – and no longer wants to work for anyone else.
On the B2C, provides the franchising scale economies. Even a 10 -unit restaurant brand can discuss more fixtures, supply and food costs than Better better than free purchase power. This gives pricing and helps the franchises protect their margins. Smart brands start with engineering costs in their supply chain so franchises from the first day of profit. Are in position.
Prices and inflation are often targeted by supply chains. What strategies are being used to protect franchises from these pressures?
Clever people first focus on profit. The Food Brand menu begins with the cost of eating the approach approach. In this way, franchises are not forced to sell interesting products that do not make them money. When costs – for example, beef or chicken – swing -ups, food franchises can adjust their marketing to move items forward with stable margins like fries. This protects both the franchise’s profit and customer experience, as the user is not watching the constant rise in prices.
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Out of food, have you seen that franchises in the other category are moving forward in important ways?
Yes, but there is a danger. More complex operations to some brands. If the power wash company suddenly adds sewers, it can remove the operators from the tracks that flourish under simplicity. Most franchises are strong operators, not businesses – complications hurt them. On the positive side, some brands inventively by making intelligence. Okay, they meet the adjustment costs and generate new income without heavy franchises.
How did the epidemic change the method of preparation for economic turmoil?
From March 2020 to 2021 to 2021, communication eliminated the sky. The franchises were calling daily, doing whatever Whatever was doing to help the franchisees survive. After that the record was born as it reinforced the loyalty of the community and consumers. The challenge is that many brands have gone back to old habits – limited help, less communication. People who have maintained these strong contacts are still performing well.
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How important is the ongoing communication between the franchisor and the franchise when the times are tough?
It’s delicate. When someone buys a franchise, suddenly they need to be an expert in HR, supply chain, marketing and community engagement. It’s great. The franchises are the key to operational support – which is why franchises pay royalties. When the brands contribute more communities and more, it pays in royalties as they perform franchises better.
Looking forward, do you expect the franchisers to continue the cost savings, or is the model already better?
There is enough space for improvement. The cost of construction of a franchise is suffering from the heavens, so innovation is essential. Franchiers also compete with each other for candidates. If we do not protect the franchisees – people endanger their lives – the model is suffering itself. Things like the Broker Commission need more consistency, excellent methods and justice. The future of franchising depends on the properly helping owners and giving them tools tools for success.
Economic uncertainty for businessmen is nothing new, but the franchise system has been created in a unique way to soften cost pressure, prices and inflation. Taking advantage of the scale economies, by innovating the supply chain and maintaining strong lines of communication, franchises can give franchisees a competitive advantage that often reduces independent operators.
To find out that franchisers are shielding and protecting them at these tumultuous economic hours, Businessman Talking to Chicago -based communications and content marketing agency, Chief Growth Officer of Mainland, spoke with 20 -year -old industry veteran Nick Paulus. He explains why franchising is naturally flexible, what smart franchises are doing to reduce costs and where the model still needs to improve.
Answers of length and explanation. Amendments have been made.
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