Technology Tops the Bill: 2023 FCXC Conference had AI on the brain

This year’s Franchise Customer Experience Conference (FCXC) was dominated by talk of technology—specifically artificial intelligence and its effects on everything from consumer marketing to franchisee benchmarking, recruitment, hiring, and much, much more.

And while conversations about AI were found buzzing around every corner, the annual get-together this past June at Atlanta’s InterContinental Buckhead hotel also delivered the goods in areas critical to franchising success, such as operations, technology, branding, consumer marketing, and consumer experience.

This year’s FCXC featured a special CMO Summit and CEO Summit. The CMO Summit focused on three major themes: 1) the role of the CMO in driving change, 2) generating demand in an economic downturn, and 3) the art and science of marketing. The CEO Summit focused on how CEOs can keep up with the rapid pace of change to unlock customer-focused results. Fittingly, it kicked off with a quote from GE’s Jack Welch: “If the rate of change on the outside exceeds the rate of change on the inside, the end is near.” Discussion topics included how to foster innovation and creativity; how to balance existing priorities with new technologies and which departments should own them; and franchisor-supplier relationships. 

The ongoing partnership between Franchise Update Media and the IFA combined to create a stellar educational and networking event. The conference also revealed findings from the Annual Franchise Marketing Report (AFMR), celebrated the winners of the 2023 Franchise Innovation Awards, and offered plenty of networking time for greetings, meetings, and deal-making.

Keynote speakers, general sessions, breakout sessions, and a sold-out Sponsor Networking area all helped deliver a record-setting conference. Unleashed Brands was this year’s Platinum Sponsor.

What can AI do for you?

AI and ChatGPT were everywhere, but perhaps nowhere more front and center than at Dan Monaghan’s session, “AI & Technology of the Future.” Monaghan is the co-founder of WSI, a digital marketing agency. He also founded Clear Summit Group (CSG), a private equity firm with a strategic focus on investing in high-growth, early-stage franchise and technology companies. 

“AI has already become better at detecting cancer in patients than trained oncologists,” he said to a packed room. “Now, generative AI is helping us create all kinds of things, from video to graphics and beyond,” he said. “There are so many ways AI can streamline and automate franchising operations and help in strategic decision making.” In addition to chatbots that can become business coaches for franchisees, Monaghan said ChatGPT can:

• respond to a brand’s negative reviews online
• create job descriptions
• write a curriculum for professional development 
• respond to RFPs
• summarize legal agreements
• compare and contrast FDDs
• do a SWOT analysis
• name products, campaigns, and even companies
• and could someday (soon?) handle franchisee support issues.

Elsewhere, in the “New Ideas for an Elevated Technology Program” session, Conway Briscoe, director of technology at DreamMaker Bath & Kitchen, delivered plenty of insights into how technology is not only changing the way brands do business, but how it also is changing brands themselves. “You probably have a franchise advisory council,” he said. “But do you have a franchise technology council? It’s one of the best ways to implement technology changes in your system more quickly, and with more buy-in from your franchisees.”

It also helps to break down silos and foster more interdepartmental communication. “We call it our technology task force,” said Ryan Aschauer, CIO at Floor Coverings International. “The brand and franchisees all work on implementing technology together.”

Briscoe noted that AI also can be used by brands to evaluate their sales team’s calls with prospects to see what they did right, what they missed, and what they could do better. And it even can be used to analyze the happiness level (sentiment) of people on a Zoom or video call.

Crisis management & more AI

Tim McIntyre, former EVP at Domino’s and founder of T/M Communications, provided a master class in his presentation, “Build Your Crisis Communication Plan.” When it comes to preventing and responding to negative events, he said, honesty, authenticity, and culture are key. “Be the person or brand you want people to think you are,” he advised.

Although the Exxon Valdez oil spill in Alaska happened almost 35 years ago ( March 1989), survey respondents still typically list the company among its top most-hated brands, McIntyre said. And remember the United Airlines PR fiasco after baggage handlers broke a Canadian musician’s $3,500 guitar 15 years ago? After 9 months of fruitless negotiation with the airline, the frustrated singer wrote a trio of songs (“United Breaks Guitars”)—all because no one was authorized to reimburse him for his damaged guitar, McIntyre said. “Do you know what it costs to care about somebody?” he challenged. “Not a damn thing.”

During a session called “Using AI & ChatGPT To Increase Marketing Copy,” panelists agreed that AI will replace some marketing jobs, but it isn’t able to do storytelling yet (among other things). “It’s going to change the skills we hire for,” said Lindsay Simpson, CMO at Athletic Republic.

Marketers currently are knee-deep in the explore-and-experiment phase of ChatGPT, which can help with outlines, summaries, blog posts, email subject lines, for example. Eric Haberacker, director of digital and social media at Hand & Stone Massage and Facial Spa, advised marketing professionals to work with it, “to see what kinds of enhancements it provides.”

Even with all that ChatGPT offers, it has its limitations, said Jessica Fasanelli, digital marketing manager at Streamline Brands. Whatever it produces must be vetted and verified by humans. The Internet is filled with information, not all of it is accurate. Far from it, in fact. “I usually don’t copy and paste everything it gives back,” Fasanelli said, “but it definitely gives me a start.”

CX fundamentals

The conference covered all the critical customer experience fundamentals in multiple sessions, including “Driving Franchisee Profits Through Customer Experience,” “Build Your Vision, Mission, & Strategy Statement,” and “Level Up Your FBC Support.” Conversations throughout these sessions included discussions of franchisee buy-in, franchisee experience, franchisee support, key customer metrics, benchmarking, brand culture, and how to best use today’s overabundance of data.

The Sponsor Networking Area opened several times to allow attendees one-on-one access to vendors, suppliers, and peer-to-peer networking, as well as some much-needed refreshment.

Inspiring, informative keynotes

Two keynote speakers addressed attendees over the course of the conference. Shawn Kanungo, an innovation and disruption strategist, brought a number of thought-provoking ideas to the stage in a fast-moving presentation. Essentially, he provided a road map for dealing with the onslaught of technological disruption affecting both businesses and consumers, and gave attendees strategies for exploring how to think and act differently to ensure their brands remain competitive and relevant.

“The Internet used to be the most efficient copying machine in the world. Now, AI is the most efficient copying machine in the world,” he proclaimed. “Innovation is permissionless,” he added, in reference to taking chances and thinking creatively. And finally, “The enemy of innovation is red tape.”

Digital marketing/social media guru and brand loyalty and customer service expert Jay Baer brought a practical, problem-solving approach to his “Customer Experience Roundtable Challenge” keynote presentation. Speed of delivery and setting appropriate customer expectations were focal points of his talk.

“Two-thirds of customers say speed is as important as price,” he said. “Give customers time, and they will give you money.” One of the biggest takeaways from Baer’s talk: “Some customers will pay more to get something faster, so offer them a ‘fast-pass’ option.” As an example, he told of how he arrived at a hotel before check-in time, but for $30 he could buy a “fast pass” to get into his room earlier. He paid. Clearly he was not alone, adding that this practice provided the hotel with almost $2 million in additional annual revenue. This idea generated a lot of nodding heads and note-taking among attendees.

He also emphasized the importance of closing the “uncertainty gap”—the difference between your operations and your customers’ expectations. “You don’t always have to be the fastest as long as your customers know what to expect,” he said. Baer concluded his keynote with a spirited competition between tables to design a campaign for a fictional custom closets franchise with these two themes in mind. It was a lively way to close the day, with prizes for the winning table.

More takeaways

The 2023 FCXC was filled with plenty more great content. Franchise Update Media’s EVP & Chief Content Officer Diane Phibbs presented highlights from the 2023 Annual Franchise Marketing Report (AFMR), the company’s proprietary and extensive survey that this year measured the marketing practices and strategies of 65 franchise brands. Read more about the report’s findings elsewhere in this issue.

Matt Layman, the IFA’s SVP for Government Relations & Public Affairs, provided an update on what the association is doing on behalf of franchising at the local, state, and federal levels. He noted that franchising is growing, with the number of establishments increasing 2% YOY, with employment in franchising predicted to reach 8.2 million. Franchising’s total economic output in 2023 is predicted to top $860 billion. Layman said the IFA is launching its Facilitative Ombudsman Program, which offers franchisees and franchisors the services of a confidential and neutral third party to de-escalate disputes.

FRANdata CEO Darrell Johnson delivered his annual report on the economy—where it is, where it’s headed, and its likely effects on franchising in 2023 and 2024. “If there is a recession, it looks like a soft landing,” he said. Johnson said a key area to keep an eye on is rising household debt levels and its effect on discretionary spending.

“Marketing success will involve looking beyond the aggregate and will be more of a battle for market share,” he said. Competition for consumer dollars is not only about share of wallet, but about how much is left in those wallets after the pandemic. “Consumers’ ability to spend is being constrained to a greater extent than any time since the Great Financial Crisis,” he added. For more on these ideas, see his “Market Trends” column elsewhere in this issue.

Innovation was hot again this year as the finalists for the coveted Marketing & Branding and Operations & Technology Innovator of the Year awards presented the goals, strategies, tactics, and results of their entries. Four finalists in each of these two categories competed for the two top overall awards. There’s more about each of this year’s 22 winners in these pages.

Plan now for next year’s FCXC, June 18–20, 2024, at the InterContinental Buckhead in Atlanta. You can find all you need to know on franchising.com.

2023 FCXC By the Numbers

190  Franchisors
120  Franchise brands
60    Sponsors
27    states attendees came from

Profile
16%    CEOs, Presidents, Founders
20%    CMOs, VPs of Marketing
22%    Marketing Directors
12%    COOs & Operations Directors (6% each)
10%    CIOs
12%    Chief Experience & Brand Directors
9%    Development Directors

Number of Franchise Locations
29%    1–50
13%    51–100
20%    101–250
13%    251–400
25%    401+

General Business Category
22%    Food
12%    Retail Non-Food
27%    Service Brick & Mortar
39%    Service (Territory, Population) No Brick & Mortar

2023 Innovation Award Winners

The 5th Annual Franchise Innovation Awards included more than 100 entrants in four main categories and 22 subcategories. The best-of-the-best innovators, game changers, and disruptors competed in four categories: Marketing & Branding, Operations & Technology, Products & Services, and Human Resources. A panel of judges evaluated each entry based on a brand’s stated objective, the problem or improvement targeted, and the metrics they provided about the results. Here are this year’s winners:

Marketing & Branding (8)
Best Big Budget Campaign:    Kumon North America
Best Digital Campaign:    Dogtopia (Canada)
Best Limited Budget Campaign (under $1 million):    RNR Tire Express
Best Loyalty App:    Tropical Smoothie Cafe
Best PR Campaign:    Denny’s
Best Social Media Campaign:    Budget Blinds/Home Franchise Concepts
Cause Marketing Champion:    Denny’s
Local Marketing Leadership:    Cicis Pizza

Operations & Technology (6)
Most Innovative Building Design, Remodel, or Prototype:    Kona Ice
Most Innovative Franchisee Support:    Wireless Zone
Most Innovative Operations Team:    Re-Bath
Most Innovative Supply Chain Improvements:    Dickey’s Barbecue Pit
Most Innovative Use of Data:    Camp Bow Wow
Most Innovative Use of Technology:    MassageLuXe

Products & Services (5)
Most Innovative Product Introduction:    Hand & Stone Massage and Facial Spa
Most Innovative Service Introduction:    Assisted Living Locators
Most Innovative Use of Customer-Facing Digital Tools:    Twin Peaks
Most Innovative Use of Data:    BrightStar Care
Most Innovative Use of Technology: Products    Cruise Planners

Human Resources (3)
Most Innovative Employee Recruiting:    America’s Swimming Pool Co., The Cleaning Authority, & Woofie’s Pet Care
Most Innovative Employee Retention:    Homewatch CareGivers/Authority Brands
Most Innovative Employee Training:    ManageMowed