2021 Reflections, 2022 Predictions for Franchising, Part 2

This is the second part of an article we began last issue. Find part 1 here. For a quick review, part 1 included the following 9 predictions/trends:

1. Candidates dropping out for a “dream job”
2. Private equity doubling down
3. Growth despite manpower shortages
4. Franchisee focus on culture to combat labor issues
5. Innovation and change to reach customers
6. Nimble workforce = success
7. Privacy changes and recruitment
8. FBCs key to driving profitability
9. Changing workplace “norms”

Here are the remaining 9.

10. Poor employee recruiting practices exposed

There is no doubt that the pandemic and aspects of available unemployment income have played a major role in the labor issues employers have faced over the past year. However, this also has exposed poor recruiting, hiring, and employee development processes. These poor (or in some cases nonexistent) practices have been exposed, which has made it even tougher on many businesses. I think many businesses will be better for it in the long run, but they must stay committed to an employee recruitment and development process at all times. This aspect of running a business cannot be a reactive process.

– Barry Bodiford, Founder & CEO, 360clean

11. Poor employee recruiting practices exposed

Franchise candidates are going to be more prepared than ever by the time they reach your development team (or website form). Make sure you have content available that tells the story of your brand and franchisees who are succeeding. Use stories and third-party sources to add credibility to your offering. No one wants to deal with a flashy salesperson and be “sold” anymore. It’s all about building relationships and providing transparency and information to get them through their discovery.

– Michelle Rowan, President & COO, Franchise Business Review

12. Leadership skills in hiring and retention

The ongoing labor shortages are forcing franchisors and franchisees to really focus in on creating a culture that attracts and retains employees. In other words, franchisors and franchisees must continue to be competitive with compensation offerings, but they also must create systems to ensure that employees feel heard, and provide growth opportunities, flexibility, and an overall environment that matches employees’ needs. Franchisors and franchisees will need to tap deep into their leadership skills and likely will have to invest in professional development to stay competitive and tuned in to employees’ needs.

– Angela Cote, CEO, AC Inc.

13. Changing consumer demands

Looking back at 2021 predictions, I think it’s safe to say we were correct about the need to embrace hyper-transformation. The only thing I may take back is saying that this would be a change for the “post-pandemic landscape,” since it’s still clearly a factor for so many businesses. Nevertheless, it’s been shown that companies that were proactive about the new work environment saw success that could set the foundation for 2022 and beyond.

This year will again be defined not only for how we attract and retain top talent, but also for how we ensure that the quality of our product or service meets the increasing demands of clients and consumers. It’s not just that our work habits have changed. So have spending habits, along with expectations for service – whether it’s pricing, attentiveness, or even as simple as open business hours. It will be essential for businesses to understand exactly where they can afford to adjust these factors in the new year, whether fundamentally or even on the margins. Ensure that you’re familiar with any remaining support programs that can help in the transition, and that you understand the effects of any possible legislative changes coming down the road.

– Sean Manning, President & CEO, Payroll Vault

14. A focus on work/life balance

2022 will be a comeback year for many industries, including ours. With the pent-up demand for travel, and more people reevaluating their work/life balance, we predict there will be a reemergence of travel advisors. People are looking to have more control over their destiny, and a home-based franchise could be the ultimate choice. In addition, our product – travel – plays into the desire of achieving a better lifestyle and creating memories – not only for the customer, but also for the individuals who see they can combine their own love of travel with a strong business opportunity. The only factor that could affect sales or growth for us are the restrictions or changes that happen because of the pandemic, which are beyond our control. Our travel sales have increased more than 35% from this same time in 2019, so we are optimistic that the worst is behind us, that cruising and travel in general will be back stronger than ever, and that we will more than pick up where we left off.

– Michelle Fee, Founder and CEO, Cruise Planners

15. Creativity and flexibility in attracting talent

Last year, my prediction was that brands would reimagine the infrastructure of people and teams. Many businesses have taken the opportunity to operate virtually or through some hybrid thereof, which has allowed them to fill positions with talent and expertise, and with people who have a stronger fit with their culture. We also saw some pretty big moves in franchising with our younger rising stars who made noise on social media during the pandemic. A strong social media presence gave them a chance to shine and become known in our industry. I think this trend continues through the next year! People will be the stars of the show, and bringing the right people onto the team will be a priority, no matter how creative a brand has to get.

– Liane Caruso, SVP, Entrepreneur

16. Continued candidate caution

Making predictions is hard enough during what used to be called “normal times.” Making them during a long-lasting pandemic that has had major economic impacts on the whole world is even more of a challenge. At Wild Birds Unlimited, we were fortunate to experience record-breaking results for both top and bottom lines in our individual stores. Anxiety about supply chain, labor shortages, and potential limitations on access to capital created a moderate prediction for our 2021 franchise development activity, but our prediction was inaccurate. We had an amazing year and exceeded all of our franchise development goals in 2021.

That being said, 2022 may be a very different year. We predict that the ongoing pandemic will result in candidate caution, that access to capital is expected to be an issue, and that labor shortages, especially in the retail sector, will continue to be issues we are dealing with in our conversations with qualified candidates. Lead flow continues to be a bit of an issue for us and for many of my peers at other brands, and the time frame to consummate a signed franchise agreement is growing a bit longer. We are still bullish, but know that making predictions will be a challenge again this year. This is a great time to review all marketing efforts and collateral to ensure that we are bringing in the best new franchisees possible, and to stick to our focus on quality versus quantity.

– Paul Pickett, Chief Development Officer, Wild Birds Unlimited

17. Go slow to go fast

2021 delivered a recovery wrapped in uncertainty. Many industries are benefiting from pent-up demand after lockdown, while being challenged with supply chain issues that will continue well into 2022. Winning brands will take more time to gather and leverage data to build confidence in their initiatives. Customer research, pilots, and benchmarking will be even more important to transparently demonstrate the ROI of brand programs and investments with franchisees. This added diligence will pay off with faster adoption and better results.

– Jayson Pearl, President, ServiceScore

18. Tech instead of people

The pandemic has led to an increase in the technology people use to automate processes, and may even lead to technology replacing some roles. People are getting more comfortable with technology because they’ve had to, from Zoom to QR codes. This may lead to lower labor costs for franchisees, with less hands-on work required in some situations.

– Angela Cote, CEO, AC Inc.