When’s the Best Time to Use AI in Your Franchise? The Choice Is Clear.

The maxim “data is king” is certainly not new to the franchise world, but how these businesses utilize data faces a new frontier, in which sliced and diced information gathered from entire systems can better serve both franchisees and their customers, not to mention a franchisor.

Thanks to this dependence on technology, franchisees, customers, and vendors alike expect texts or emails to be answered almost immediately. Businesses can now expect instant public feedback from several channels. Having an artificial intelligence-powered system that automatically responds quickly to unfavorable reviews has the potential to turn a bad situation into a good one.

But AI isn’t just about communications: It can help improve training and marketing programs and can also help you make better business decisions because it can more accurately predict the future. The newfound ability to analyze previous years’ system-wide data multidimensionally can be a huge assist in forecasting the next quarter (or the next five years) — a solid foundation on which to build. It can also be the basis for better brainstorming solutions for increasing sales, lowering costs, or determining where the next franchise territories should be awarded.

A cautionary note: Core values might stay relatively the same over time, but shopping and dining patterns can be quickly altered by a hot new concept or fad. The point is that there is no crystal ball in franchising, but there are patterns and trends that help guide future decisions.

AI is changing…everything. How AI has transformed the food service business is well documented, but it has produced seismic changes to other retail segments as well. For the beauty industry, it has fueled the ability to customize both products and the consumer experience, thanks to tools such as virtual try-ons. This mass personalization also works for a variety of other products. Because a generous segment of consumer buying has permanently switched to online forms, AI gives brick-and-mortar retailers a much-needed way to attract customers and build loyalty. And for fitness franchises, sophisticated information collection allows operators to access several data points, such as diet, workout frequency, and calorie burn to personalize clients’ experiences and build that same all-important loyalty, while also selling targeted ancillary products or services.

Because AI can be expensive, especially if rolled out in a large franchise system, it’s important to ensure that associated programs streamline processes, not simply add layers of data that aren’t useful in the long run. One of AI’s roles is to help reduce costs and increase efficiency. Its preferred effect is not always saved manpower but rather a deeper dive into information that will help a company be innovative and efficient.

Whether it’s a burger-flipping robot in the kitchen, a help desk chatbot, or facial recognition technology, AI needs to solve a real problem. AI is especially helpful in franchise recruitment, where not jumping on a lead fast enough can mean losing it to the competition. Having chatbots or automated text messaging systems in place — armed with useful information ready to be sent automatically to prospects — can get the ball rolling until a salesperson can respond personally. Another task that can be accomplished through AI is comparing an applicant’s profile against the system’s most successful franchisees to see if there is a good fit.

This type of predictive analytics also allows a franchise to look at peripheral information such as weather, traffic patterns, upcoming holidays, and slow times of day. This allows a franchise more certainty in ordering products, in staffing, and in eliminating waste. And because the key to any franchisor’s success is the success of its franchisees, these tools can improve the latter’s financial performance and validation at the same time.

With AI, auto-generated content, solutions for operational inefficiencies, answers to consumers’ questions, and responses to franchise recruitment inquiries can be available 24/7. But be mindful that its solutions need to be customized to various situations to maximize its effectiveness.