Franchising forecast for 2024
01st Feb 2024
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By Emily Ainsworth
Strolling the city streets, chances are you’ll find more than a few franchise storefronts lining the sidewalks. From the familiar facades of The Coffee Club to the iconic golden arches of McDonald’s, franchising harbours promise for strategic investors and budding proprietors. But what lies ahead for this burgeoning industry? Let’s look into the past to shed light on the future of the industry.
Diving into the digits
Chai-ching! The Australian franchise sector is no small fry, raking in a staggering $169.5 billion in 2023. With nearly 100,000 franchises scattered across the country, employing over half a million people, the industry has cultivated an ecosystem of remarkable scale. But like many industries, sector-wide revenues have actually dipped in recent years thanks to the economic impact of COVID-19. Amid lockdowns and job losses, growth stalled at a negative 1.7% last year. With the economy stabilising and consumer confidence rising, the good news is the market size is expected to grow in the coming years.
So what’s on the forecast for franchising in 2024? Innovative franchisors are already embedding forward-thinking strategies to ensure sunny skies in 2024, including:
- Embracing the AI age
Automation is the name of the game, with Artificial Intelligence (AI) changing how businesses operate by streamlining operations and enhancing data accuracy. With AI-powered insights, entrepreneurs can use automation and predictive analysis to understand customer behaviour and offer services that exceed expectations, such as personalised product recommendations that match their preferences. In addition, AI-powered chatbots allow businesses to solve customer issues and quickly respond to their questions.
- Championing sustainability
Sustainability isn’t just a buzzword; it’s crucial. Prioritising sustainability through comprehensive recycling initiatives and reduced carbon footprints will appeal to eco-conscious consumers.
- Riding the wave of service-based franchises
Service-based franchises will thrive as evergreen money-makers, especially in healthcare, beauty and fitness. These areas are always in demand, and if a franchise falls in the essential services category, they can swiftly scale to match persistent local demand.
- Harnessing the power of multi-channel digital marketing
Franchisors are casting their nets far and wide, leveraging every digital touchpoint to reel in customers, from email marketing to social media. Refined digital marketing efforts will allow engagement across myriad platforms to attract patrons wherever they are online, especially with a cohesive and consistent brand voice.
- Crafting immersive in-store experience
With the rise of e-commerce, franchises are raising the stakes, transforming their retail spaces into experiential playgrounds with immersive technologies. Cutting-edge brick-and-mortar stores will provide bespoke experiences via technologies including virtual reality to entice customers, despite the convenience of e-commerce.
If executed adeptly, these techniques could allow Australia’s franchise niche to reclaim its previously meteoric rise. The opportunities loom large for intrepid franchisees with vision and grit to match.
