Amid severe economic uncertainty, the last couple of years has been challenging for most businesses. But heading into 2022, franchisors are ready for expansion into new markets, and the pool of prospective franchise owners is also increasing consistently. Here, we take a closer look at how the definition of franchising has evolved going into 2022 and how businesses need to modify their operations to keep up with the times.
A brief look into the basics of franchising
Franchising is a way for businesses to expand their operations to new locations and bring their products and services to more customers without owning the operations directly. A franchising agreement involves a business owner (franchisor) extending a license to a third party (franchisee) to operate a business storefront using the franchisor’s brand name and established systems.
In 2022, amid the prevalent financial turbulence, franchising is a less risky alternative to starting a new business from scratch. This is due to the fact that entrepreneurs and new business owners can tap into already established business models and exploit the network to turn their venture into a successful unit.
How franchising will operate in the years to come
As stated earlier, the interest in franchising in 2022 is exceptionally high, which is changing the conventional definition of franchising. Franchisors will need to shift their focus on appealing to this new pool of prospective franchise owners by creating an effective marketing plan and investing in modern technologies like the internet.
Discussed below are some of the top trends that are expected to take off in 2022. The following list can be used by aspiring franchise-owners to plan their business operations and find more success along the way.
Several trends after the onset of the lockdowns were the result of last-minute requirements and are, therefore, more likely to stay throughout 2022. Consumers are accustomed to new facilities like online ordering and deliveries, no-contact shopping, etc. Franchise businesses that focus on fulfilling these requirements by upgrading their business models have a better chance of success in a competitive market.
Flexibility and hybrid operations
Due to product shortages and supply chain hindrances, franchise owners are more flexible towards the rules that would have been cut and dried in the past. Franchisees can experiment with newer business models – like a store-in-store approach and co-branding – to optimise their operations and generate profits. This model has been exceptionally beneficial for UPS and several quick-service restaurants across the world.
Increased focus on innovation and change
There is no denying the fact that internet technology is rapidly changing the way businesses operate. While the franchising industry has been slow to catch up, 2022 will see franchises adopt and explore various innovative technologies and strategies to exploit new opportunities in the post-pandemic world.
The definition of franchising has evolved substantially in the last two decades and will continue to do so going forward. Over the years, franchisors and business owners have built strong relationships with their internal teams, which has allowed them to navigate the difficulties of the market without losing operations. Now, the franchising industry is stronger than ever, and such partnerships have the opportunity to take their business to the next level.
You may be interested in: What Are the Business Benefits of Buying a Franchise?