As a franchisee, finding success means meeting customers’ demands while working within the confines of a franchisor’s business system. As market conditions change and new technologies emerge, franchisees can struggle when their franchisors fail to keep pace with the times, and they can incur unnecessary financial burdens when their franchisors choose to follow the wrong path. The following are five trends that are likely to impact franchisees – for better or for worse – during 2018.
5 National Trends (With Legal Implications) Likely to Impact Franchisees in 2018
1. Proprietary Apps and Online Ordering
Certain franchised brands have emerged as leaders in the trend toward proprietary apps and online ordering. Several quick service and casual dining restaurants now offer tableside tablets for ordering food, and restaurants are increasingly encouraging customers to order online for instore pickup. When used effectively, these tools can streamline the customer experience and make it easier for franchisees’ employees to keep pace during periods of high demand. However, without thorough testing and a clear plan for implementation, they can confuse and frustrate customers, and they may be destined to become relics of the past.
2. Facial Recognition and Alternative Payment Options
While alternative payment options – such as Apple Pay and PayPal – have been making online shopping easier for years, many brick-and-mortar concepts are just starting to incorporate these options into their point-of-sale systems. If your franchisor wants to offer alternative payment options (including use of facial recognition) in test locations or across the entire franchise system, franchisees may have little choice but to bear the expense under the terms of their franchise agreements.
3. Subscription-Based Product and Service Offerings
From monthly “boxes” to all-inclusive luxury vehicles, subscription-based products and services comprise another trend that is finding its way from the Internet to the physical world. Is selling a prescription-based product or service the most profitable option for your franchise? If your franchisor wants to roll out a nationwide advertising campaign, it may not matter.
4. Hiring, Hiring, Hiring
Blue MauMau reports that franchise hiring numbers dropped slightly in December 2017, but still remain high and continue to reflect strong growth in the small business sector. While franchisors spent much of last year worrying about a potential shift in the legal landscape that would have treated franchisors as joint employers of their franchisees’ employees, a recent decision from the National Labor Relations Board (NLRB) restored the prior (and more franchisor-friendly) joint-employer standard.
5. Legal and Regulatory Upheaval
From crackdowns on illegal immigration to minimum wage hikes and new tax laws that eliminate deductions and change the tax rates for corporate entities, 2017 saw a host of legal and regulatory changes, and franchisees will most likely to continue struggle with these types of issues in 2018. While some of the compliance burden may fall on franchisors, more likely than not, it will be franchisees who bear the brunt of the risk and expense.
Goldstein Law Firm | National Franchise Lawyers
Our firm brings over 30 years of experience to representing franchisees and dealers in the United States and worldwide. If you have questions about your franchise or are facing a dispute with your franchisor, we are here to help. To schedule a free and confidential consultation with franchise lawyer Jeffrey M. Goldstein, please call (202) 293-3947 or send us a message online today.
