Leverage the Challenges of Inflation To Differentiate Your Franchise in the Market

Most of us really don’t like to talk about the rising costs of goods and services we’ve experienced over the last few years, but inflation doesn’t just go away overnight.

According to a recent study by BoeFly, a financial technology company that delivers online tools for business solutions, inflation remains a concern for franchisors, and less than half of the respondents expressed at least some confidence in meeting their growth goals for 2024.

As consumers continue to feel the squeeze, your franchisees may have already expressed concern about their ability to meet projections and retain customers. As a franchisor, you have a responsibility to ensure that you continue to provide advice and excellent franchisee services as you both weather the current economic challenges.

Now is not the time to reduce your franchisee services. In fact, during times of economic downturn, you’re probably better off providing more services and offering advice on how your franchisees can limit spending.

In the long run, quelling franchisee fears can help you expand your franchise’s growth despite a difficult financial environment.

Managing costs

With the cost of goods and services continuing to rise, it makes it more expensive to do business. This can not only shake up your franchisees’ growth plans, but it can also make them wonder how they can stay in control of a profitable business.

As a franchisor, one of the best things you can do is advise your franchisees on ways they can control costs. There are steps your franchise owners can take to manage the high cost of inflation, including:

• Monitor expenses: Help the franchise owner have clear data and KPI’s to monitor crucial financial levers key to the business. Continue to negotiate better pricing with your suppliers to minimize price increases.
• Diversity of the customer base: If you’re a franchisor that helps your franchise owners with their marketing, you can also suggest that you develop a marketing plan with them to create a new target audience. If their customers are cutting back, you may need to cast a wider net to make up the difference when current customers can’t go deep.
• Invest in new technology. Customers are shopping for goods and services online more often using a computer or their cell phone. They want and expect services immediately. As the franchisor, be a thought leader in your technology platforms and strategies. This will allow your franchisees to be viewed as a cutting-edge solution for their customers.

Providing more robust services

When a potential franchise owner begins researching a franchise opportunity, one of the things that can differentiate your company from many of the others is offering more and better services.

Most franchisors in today’s market provide centralized marketing help, a customer retention management platform, and other perks to ensure their franchise owners have the tools they need to succeed.

By offering more training programs, negotiating reduced supplier pricing, and even providing financial assistance, you can keep franchise owners happier. Maintaining a positive and responsive company culture during times of high inflation lets your franchise owners know you care about them and their concerns.

Growing during inflation

While many franchised organizations prefer to cut back during times of high inflation, you can prove your agility by exploring growth.

If you have a franchise owner who consistently shows growth despite the economy, approach them about becoming a multi-unit owner, for example. You can also look for new territories where the customer base needs your products or services despite higher costs.

By going against the common trend of downsizing during economic uncertainty, you will differentiate your franchise from your competitors. Potential entrepreneurs are often impressed when they see a company that turns lemons into lemonade.

Simply by being more attentive to your franchisees, avoiding the natural tendency to make cuts to your services to save money, and thinking outside the box, you can meet the challenge of high inflation head-on, and this could result in a boon for you and your franchise owners.

Bill McPherson is the vice president of retail network development for PostNet, a global leader in high-quality printing and shipping solutions, and AlphaGraphics, a leading franchisor of printing and marketing solutions.