Higher consumer prices, rising interest rates and declining housing prices are expected to drive reduced growth, negative sentiment and altered consumer preferences in 2023. Quality franchise systems are responding to the challenges and opportunities before them.
Five franchise business themes for 2023
FranData Australia’s industry surveys and broader market dealings show five key themes being addressed that will have an impact on franchising in 2023.
The ability to attract and retain staff at a franchise unit level and at support office level has been a major challenge in 2022 and is expected to continue for the foreseeable future. One silver lining of a recessionary environment can be the increased number of available staff as employment rates and job opportunities fall.
With input costs rising and consumer preferences changing, franchise systems are revisiting their offerings to ensure their product range and delivery channels are keeping up with these changes.
As changed consumer behaviour has led to greater price sensitivity, franchise systems are reviewing their marketing approaches. Messaging, campaign focuses, target audiences and delivery mediums are all under review.
The recruitment of new franchisees has long been a key need for franchise systems to grow their networks. After several disruptive years, a renewed focus is apparent and many franchise systems are hopeful of attracting some quality applicants from corporate and other restructures in the broader economy.
With prospective franchisees seemingly becoming more sophisticated, a compelling proposition or point of difference has never been more important. In addition, many franchise systems have a strong focus on growing multi- unit operation within their networks.
Access to finance
The last few years have depleted the cash reserves of many and changing consumer preferences have prompted consideration of further investment into individual businesses.
Once the merit of further investment has been established, the key focus of franchise systems turns to the ability of the individual franchisee to access this finance and the overall appeal of their individual franchise system to the franchise lending community.
Demonstrated resilience will help franchising in 2023
While uncertainty remains around the likelihood and depth of a recession this year, the franchise sector has demonstrated great resilience over a long period and again appears well placed to navigate its way through unpredictable times.