Technology has transformed the way franchisors and franchisees do business. From the introduction of electronic point-of-sale (POS) systems to the advent of social media, all types of technological innovations have made their way into the franchise realm. Recently, the rate of innovation has sped up significantly, and this means that franchisees are being asked (or forced) to adopt new technologies with increasing frequency.
A recent article on Forbes.com examines six technological trends that are likely to have a big impact on franchising in 2020. While we have seen these innovations make their way into many franchise systems already, we expect even more franchisors to require franchisees to adopt these technologies in 2020 and beyond:
1. Artificial Intelligence (AI)
While artificial intelligence used to be fodder for sci-fi movies, today it is an important tool for many different types of businesses. Franchisors and franchisees are utilizing AI for everything from managing inventory to anticipating market demand, and many are finding that it promotes efficiency while also providing a leg up on the competition.
2. Digital Payments
Today, mobile franchisees can accept credit card payments on the go, and customers can pay at the register with a swipe of their phone. Making it easier and faster for customers to pay means that more customers are likely to buy and that the checkout process is quicker than it used to be. This is a win-win solution that we expect will become much more commonplace in 2020.
3. Delivery Apps
Third-party delivery apps like Uber Eats and DoorDash allow franchisees to sell to more customers without increasing their overhead. They also allow customers to shop from the comfort of their home or office and to avoid the time and hassle of going out. Cross-promotion with delivery app companies allows franchisees to gain greater market exposure as well.
Gamification tried to take off a handful of years ago, but it never quite gained traction. Now, it’s back, and it seems that the demand might finally be there. With Millennials now making up a substantial portion of the target market for most franchisees (and with Generation Z not far behind), gamification is seeing increased adoption both internally (for use with employees) and externally (for use with customers) across a broad spectrum of franchise systems.
5. B2C Text Messaging
Have you noticed that you are getting more text messages from businesses? If so, you are not alone. As Forbes.com reports, franchises have begun using text messaging for everything from running “flash sales” to conducting customer surveys, and this is a trend that we expect to see continue in the New Year.
6. Loyalty Programs
Finally, while loyalty programs are nothing new (remember the punch cards you used to keep in your wallet), many franchisors are transitioning their loyalty programs to the digital realm. This makes tracking (and advertising) easier, and Forbes.com suggests that the combination of digital loyalty programs with AI may lead to franchisees offering customized rewards.
Contact National Franchise Lawyer Jeffrey M. Goldstein
If you are thinking about buying a franchise or have questions about your legal rights (or obligations) as a franchisee, we encourage you to get in touch. For a free consultation with national franchise lawyer Jeffrey M. Goldstein, call 202-293-3947 or tell us how to reach you online today.