Seven Trends and How to Ride Them

Last night the CEO of an international franchise network in the education space asked me what trends she and her executive team should be considering. Because we work with a lot of different brands, I have a privileged perspective on this. Here's what I told her, along with some tips on working with these trends. 

1: It's a Mad Mad Mad Mad World

The speed and unpredictability of social, technological, economic and political change is making many people feel like the world's gone a little crazy. This is also creating a pervasive sense of social anxiety.

A powerful counterbalance to stress is a solid support network, where you know there are people in your life who have your back and share your values. The benefit of being part of a franchise network, where you are doing meaningful work with like-minded people, and receiving practical and social and moral support should never be under-estimated.

2: The Silver Tsunami

A record number of Baby Boomer franchisees are reaching retirement age and are looking to sell their businesses. Many have been so stressed and busy just trying to survive these last few years, that their businesses are not in great shape for sale.

Forward-thinking franchisors are guiding their older franchisees towards a graceful exit where they can maximise the value of their business and hand over a profitable asset to a new generation. Guidelines on how to price a business based on EBITDA multiples are a good start.

Round tables and expert coaching groups are also a good idea. I recently facilitated a popular panel on this topic at a conference. Franchisees who had successfully sold or purchased a business shared their experience and insights. For instance an older franchisee had sold his business to his manager and we had them both on the panel.

3: Adapting in a world of hyper change

Another repercussion of the massive changes referred to above is the need for companies to adapt what, how and who they sell to. In many industries, what worked in previous years is increasingly not working now. New unexpected competitors are also appearing.

Last week the big US tech giants faced this with the release of DeepSeek, a more powerful, freely available AI platform developed in China. This was also created for a fraction of the cost by a small start-up, and has wiped billions from their valuations.

While innovation has always been important, responsible franchisors are working hard to introduce initiatives that will keep their networks relevant. Because people generally resist change that is forced on them, franchisors need to introduce these with a balance of directive leadership, while simultaneously collaborating with franchisees and taking on board their feedback. (We have developed a workshop to help with this called Getting Franchisee Buy-In to Change.).

4: The big squeeze

While margin compression is not a new problem, franchisors and franchisees are increasingly finding it hard to protect their profitability. This has been exacerbated by increases in the cost of doing business.

Franchisees can be reluctant to raise their prices for fear of losing customers. Some of our clients are reconsidering how to help franchisees raise their prices while maintaining or increasing value to customers. For instance, leveraging the power of authentic relationships, convenience, value pricing and superior quality.

5: An era of big deals

Just as Baby Boomer franchisees are looking to sell their businesses, a record number of Founders are selling their franchise networks to private equity groups.

Franchise brands are also merging and coming together under umbrella brands at an unprecedented rate. For instance, the MTY Food Group in Canada now operates more than 70 separate fast casual, and quick service restaurant brands.

Some franchisors are deliberately retaining Founders as minority investors because they are trusted. They are then artfully managing the unique passion and cultural charisma of these people so they remain available to keep the corporatised network in touch with its family values and heritage.

6: Talking about my generation

While intergenerational tension is nothing new, it is having an impact on day-to-day workplace relationships, especially in franchise networks.

Most franchisees are still Gen X and Boomers (though this ratio is changing), while Support Office roles are increasingly occupied by younger Gen Z and Millennial staff and managers. A common source of tension relates to expectations around structure, face-to-face meetings and verbal conversations.

The ability to master continual changes in technology is also more of a challenge for us older folks. For instance, most franchisees still like to have their phone calls answered, and become frustrated when required to communicate through digital, ticketing or chat-based processes. Younger franchisees also expect their franchisor team to be technologically savvy and want more flexibility in how meetings are conducted.

Smart franchisors are mindful of these differences and encourage a culture of tolerance and support for the needs and preferences of various groups. This tolerance of diversity also of course applies to all groups of people.

7: Humility is not a dirty word

Many of the above trends involve the professionalisation of franchising, where experienced executives are recruited into a franchisor's corporate team.

While this is a good thing, in that it brings more discipline and accountability into the business, it also has a shadow side. Every new executive brings with them enthusiasm and ideas on what worked in their previous roles or organisations. However, the desire to make an impact and drive change can sometimes be misguided and backfire.

Long-tenured franchisees are used to seeing C-level executives come and go. And they tend to roll their eyes at the perceived arrogance and ignorance of these people who often do not understand the franchisee mindset or the culture of the business they have joined.

A smart approach for new franchisor executives is to spend the first 100 days listening, asking questions and getting to know franchisees. Also genuinely consulting with a sense of humility in the early stages of developing new strategies rather than expecting franchisees to rubber stamp these at the end.

So there you have my 7 trends. By the way, no AI was used in the creation of this tip - you are getting the real me.

Until next time I wish you all the best in our mad, mad, mad mad world!