Balancing Data Privacy Rules and Franchise Recruitment at LIT Method

We asked Michael Abramson, chief strategy officer at fitness franchise LIT Method, how the new data privacy rules are affecting his franchise recruitment strategy and tactics.

Data privacy has been thrust into the spotlight in recent months, as new regulations have come into effect in the U.S., Europe, and beyond. Two key examples are the CCPA (California Consumer Privacy Act) in the U.S. and the EU’s GDPR (General Data Protection Regulation).

At first glance, these regulations present a hurdle for brands looking to market their franchise opportunities, as potential franchisees are now more wary of how their data will be used. However, there are ways to overcome this hurdle and foster trust with potential franchisees.

While there is an impact on franchising from data privacy concerns, brands can overcome the challenges this presents by enacting key best practices. In the age of “big data,” how data is used is paramount to the success of the company, both for prospecting and for de-risking business decisions, making data privacy an important issue for all businesses.

This is especially relevant in franchising. Franchisors rely on marketing to attract potential franchisees, and significant sets of data are often used in this process. With the new data-privacy regulations in effect today, franchisors must be more transparent about how they use data. There must be clarity on what information they are using, where they are getting it from, and who will have access. This transparency is essential in building trust with potential franchisees, especially because franchising is relationship development with economic underpinnings.

In addition to being transparent about how data is used, franchisors also must review their technologies and growth strategies. New technologies may be needed to comply with data privacy regulations, and growth strategies must be adapted to take these regulations into account. Nevertheless, data privacy should not be seen as a hindrance to franchising. Rather, it should be viewed as an opportunity to start the prospecting process from a position of trust and to continue building that trust with potential franchisees.

Don’t just take my word for it. According to Cisco’s 2021 Data Privacy Benchmark Study, 76% of companies that invested in a better user experience as it relates to privacy, saw direct benefits in terms of customer loyalty and trust. This result is statistically significant, painting a silver lining for the companies that embrace the new age of data privacy in which we live. In sum:

1) Regroup. Develop a new data privacy game plan.

2) Simplify, simplify, simplify. Make sure prospective customers can easily and clearly understand your data privacy policies.

3) Try new things. Technology is rapidly advancing. There are more and more ways to connect with prospects to collect first-party data.