Franchisors Benefit When AI is Paired with Their Existing Unstructured Data
Artificial intelligence (AI) is making waves across every industry, and over the next five years it will have an unbelievable impact on the world of franchising. While much of the recent buzz around AI has centered on chatbots, large language models (LLMs), and image generating tools, these are just the tip of the iceberg. The true potential of AI for the franchising industry lies in its ability to make sense of unstructured data—a powerful capability that’s transforming businesses in ways many never thought possible.
A Deloitte study found that only 18 percent of scaled companies are able to effectively leverage unstructured data to control risk and drive innovation. This untapped resource represents a significant opportunity, and AI is the key to unlocking it. For franchisors, AI isn’t just about speeding up processes. It’s about revolutionizing how they operate by turning previously unusable data into automated processes and actionable insights.
AI’s real superpower is its ability to process and interpret unstructured data—anything that doesn’t fit neatly into a predefined structure, like emails, documents, videos, receipts, or invoices. Take the insurance industry as an example. This is a sector I know a lot about from my tenure building AI solutions that transform the management of insurance claims—a process traditionally bogged down by mountains of unstructured data.
Insurance claims are often complex, with multiple parties generating an endless stream of notes and documents. Before AI, claims handlers would spend upwards of 30 minutes sifting through this data for each claim. But with AI-driven automation, the time spent on simple claims was reduced to mere minutes, freeing up handlers to focus on more complex cases. The result? A more strategic, efficient, and focused team.
The franchising industry is similarly awash in unstructured data. Franchisors deal with hundreds of pages of contracts for each partnership, millions of emails, location photos, vendor invoices, and more—data that results from everyday operations and compliance tasks. But what if AI could analyze, interpret, and act on this data?
AI can turn a mountain of unstructured data into a treasure trove of insights. With AI, franchisors no longer need to operate with little visibility into their operations or expend valuable resources just to process their data. Instead, they can leverage this data to make informed decisions, optimize operations, and focus on what truly matters. By enabling franchisors to act on data that was previously unusable, AI grants them unprecedented visibility into their organization. This newfound clarity allows them to focus on improving their systems, supporting specific franchisees, and ultimately driving better margins through reduced costs and increased time for revenue-generating activities.
The potential applications of AI in franchising are far-reaching, but here are a few areas where it can provide the most value:
- Compliance monitoring: AI can monitor every aspect of a franchise network's operations to ensure all parties—suppliers, vendors, and franchisees—remain compliant. This oversight not only helps maintain brand integrity but also ensures that franchisees are performing at their best, maximizing revenue opportunities for the franchisor.
- Risk profiling: AI’s ability to proactively monitor legal and operational risks across a franchise network, even if it spans thousands of locations, is a game-changer. By identifying potential risks long before they become problems, AI allows franchisors to address issues before they impact the business.
- Focus on innovation: As AI streamlines operations and processes across the board and centralizes network-wide reporting, franchisors can shift their focus to what truly sets them apart—relationships, brand, and unique intellectual property. In a competitive landscape, these elements will become the defining factors of success.
AI is poised to revolutionize the franchising industry over the next several years. Those franchisors who are first to harness the power of AI to unlock the value hidden in their unstructured data will find themselves with a strategic advantage. By refocusing their efforts on growth-driving activities, they’ll be well-positioned to lead the pack in the next era of franchising. So, as AI continues to roll out across industries, franchisors should ask themselves: Are you ready to dig deep and discover the goldmine hidden within your data?
Gary Liskovich is the CEO and Co-founder of Harmonyze, an AI-powered platform helping franchisors improve profitability across scaled franchise networks.
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