The days of the ‘proven business model’ have gone. These days it seems that business models are only there to be broken. We’ve already made some predictions about franchising in 2016 – but what does the future look like for your particular franchise? And how can you protect your franchise from disruption?  

 


Commercial cleaning

 

What’s in store:


Commercial cleaning hasn’t changed a lot over recent decades. Yes, some new technology has emerged, but in essence the industry is the same as when I used to push a vacuum cleaner and swing a floor buffer to make some money during my student days.


But all that could be about to change. Robot vacuum cleaners, crawling around with their little antennae out like beetles, are making an appearance in more and more homes – and now their big brothers are starting to transform the repetitive and tedious floor vacuuming and scrubbing tasks I used to love so much.




The Intellibot commercial cleaning robot establishes its floor-cleaning parameters for each shift then moves from area to area without manual intervention.



In the face of global pandemics such as the H1N1-virus, people are waking up to the fact that the health of entire populations depends on clean environments. At the front line of this battle, the cleaning industry is responding to the demand for higher standards with greater use of technology, software and biotechnology.


Watch out for:


  • Robotics – automated, intelligent cleaning equipment
  • Biotechnology – biobased cleaning agents that utilise non-pathogenic and non-GMO bacteria and botanical surfactants, the use of enzymes to eliminate bacteria
  • Global pandemics such as H1N1 putting pressure on the industry to which means cleaning professionals will be held to higher standards in the future.
  • ‘E-water’ and renewable cleaning - electrolysed or engineered water eliminating the need for harsh chemicals
  • Customised mobile cleaning solutions – taking the guesswork out of cleaning effectiveness and increasing the profitability of cleaning companies
  • ATP surface testing diagnosis – to identify and manage hygiene trouble spots


What to do about it:


If you can’t beat ‘em, join ‘em. As most franchised cleaning services rely on franchisees rather than low-cost labour, the structure of the franchises will need to be altered to take into account the greater productivity and lower operating costs of robotics. Because many repetitive and tedious tasks such as vacuuming and floor scrubbing can be automated, the need for human labour will be reduced, and cleaners will be able to apply themselves to higher-value cleaning using the latest biotechnological tools.


Some franchises in New Zealand which will be affected:


  • Clean Corp
  • Paramount Services
  • Mr Green Commercial Cleaning
  • Crestclean

 


Courier Services


What’s in store:


On the face of it, the courier industry is like the cleaning industry in that it doesn’t appear to have changed much in recent times, but that’s because most of the change has taken place behind the scenes in the field of global and local logistics. The doyen of the New Zealand courier industry, Fastway, had been steadily pushing its tentacles out from its Hawkes Bay base and into the wider world before it was snapped up earlier this year by Dubai-based Aramex for $125 million. The main driver of the courier industry’s growth has been a relatively new business model – e-commerce and its need for product delivery. But another new business model and a raft of new technology may be about to threaten the traditional courier business model.    


Watch out for:


  • Expansion of courier services from its traditional base of about 90% business customers to more of a focus on private customers
  • Courier companies trying to differentiate themselves by focusing on the customer, offering specialist services for niche markets (security, frozen and refrigerated foods, biohazardous waste, etc) and offering new value-added services such as packaging and 24/7 delivery
  • On-demand services such as US-based Postmates which gives ordinary people the opportunity to become vehicle or bike couriers in the same way that Uber enables almost anyone with a car to become a taxi driver



DHL is experimenting with delivery drones capable of flying high above couriers stuck in traffic.


  • I hate to keep droning on about this but e-commerce giants such as Amazon have become so dependent on third-party delivery services in their supply chain that they are now experimenting with alternatives they may be able to manage themselves – and the use of delivery drones, which have the ability to fly above traffic jams and other delivery cost factors, features high in their priorities right now
  • Self-driving vehicles may seem like something out of the Jetsons, but there are a lot of companies – including Google, Mercedes, BMW, and Tesla – taking the concept very seriously. In fact, BI Intelligence reckons there will be 10 million self-driving cars on the road by 2020 – gulp, that’s just four years away!  

 

What to do about it:


It may sound as if I’m droning again, but if you can’t beat ‘em, join ‘em. In order to survive and thrive in the future, courier companies need to go beyond their delivery van business model. Expanding their service base and offering specialty services is one thing, but taking deliveries to a new level with on-demand-like services and drones may be just what their clients need from them. 


Some franchises in New Zealand which will be affected:


  • Fastway Couriers
  • Courier Post
  • Urgent Couriers

 


Cafes and fast food


What’s in store:


Cafe and fast-food chains occupy a sizeable chunk of the franchise industry. You wouldn’t have thought that these kinds of businesses, being service businesses, would be a target for disruption – but you’d be wrong. Franchise legend McDonald’s is under attack from many sides – from minimum wage increases in many different parts of the world to the NRLB judgement that people from McDonald’s head office should be sitting around the negotiation table with their franchisees and their franchisees’ employees. McDonald’s may have already been looking at ways of reducing franchisees’ labour costs – but the attacks sure as hell accelerated the process.  

 

Watch out for:


  • A continuation of the whole fast casual revolution as the antidote to fast food
  • The health-ification of fast food in response to growing outcry from health professionals and the public
  • Faster fast food – as in mobile food services such as food trucks and third-party delivery services from your favourite café so you never have to leave your home
  • Better food safety systems in the wake of Chipotle’s sudden fall from grace



The McDonald's store of the future with self-ordering kiosks and fresh natural food choices.


  • More technology to optimise the ordering and delivery process, both before arriving and on-arrival – including McDonald’s ordering kiosks that eliminate the need for wait lines and hand-held mobile devices used by café staff to send your order straight to the kitchen
  • The greater use of themes to differentiate cafes and fast food outsets – see Japan’s Back to the Future Cafe  
  • The “coffeeshopisation” of the world where any type of business, from bookshops to tyre sellers, will provide a complete coffee shop experience as part of their core business – what will happen to the likes of Starbucks?
  • 3D printed food – this is probably up there with the Jetsons and fairly far off, but we can see the day when your favourite café will be able to print your favourite dish customised to your precise requirements


What to do about it:


If you own or manage a café or fast food joint, you need to be making technology and mobile services your friend, not your enemy. Even if setting up a food truck or providing delivery services to your customers aren’t big money-makers for your café, you may need to take the leap just to keep up with your competitors and keep your brand in front of your customers – wherever they happen to be. Alternatively, you can go the other way – providing a dining experience that thumbs its nose at convenience and mobility with highly personalised service and good old-fashioned quality.    


Some franchises in New Zealand which will be affected:


  • McDonald’s
  • Carl’s Jr
  • Columbus Coffee
  • Esquire’s
  • Habitual Fix
  • The Coffee Club

 


Retail


What’s in store:


What’s in store for retail may be that it’s no longer in store, if you believe the e-commerce pundits. But retail stores do have some advantages over their cyberspace competitors, and recently many of them have stopped throwing their hands up in helpless horror at the incursion of e-commerce into their market, and they’ve started to take advantage of their advantages. One of these – and it’s a biggy – is the ability of physical stores to create a whole customer experience that online stores just can’t recreate.


Watch out for:


  • The greater use of in-store themes, experiences and services to differentiate physical stores from online stores
  • These experiences may include opportunities you wouldn’t normally expect, such as health and fitness testing in an electronics store
  • The option to order products online and pick them up from stores or provide fast local home delivery, providing the almost-instant gratification that online stores can’t currently provide
  • Online offers and messages to bring customers into stores, especially if they happen to be passing or nearby



Store assistant robots are being trialled in big-box stores such as Home Depot and Lowes in the United States. You simply tell or show them the products you want and they take you there and explain the product details.


  • Big-box stores such as Home Depot and Lowes in the United States have introduced store assistant robots which guide customers to the products they want and explain product benefits
  • Retailers will target people who walk by their store through highly personalised offers or messages about things like new styles or reminders about items saved on a wish list.
  • Using mobile apps as a kind of personal concierge when shoppers enter stores and store beacons to deliver highly relevant and personal content on customers’ apps
  • Using augmented reality on shoppers’ apps so they can see how they would look wearing something without trying it on
  • See the “coffeeshopisation” of the world above

 

What to do about it:


Retailers are reinventing themselves, taking e-commerce on with their own online stores while at the same time exploiting their physical advantages over pure-play e-commerce. Customers still like to see and touch products before they buy them, and shopping is an experience most people still enjoy, especially if retailers understand the social and entertaining aspects of shopping. 


Some franchises in New Zealand which will be affected:


  • Toyworld
  • Bedpost
  • Stirling Sports
  • Agatha Paris

 

 

Building


What’s in store:


Thirty years ago, most New Zealand homes were built by independent builders, but franchising has turned that around and Kiwis have come to trust brands such as GJ Gardner Homes, Signature Homes and Jennian Homes. Technology, in the form of pre-nailed framing and nail guns, has also transformed house construction. Now digital technology is reshaping the whole building experience, from being able to plan and ‘walk through’ your home before building has even started, to monitoring every stage of construction as if you’re actually on site.


Watch out for:


  • Growing numbers of modular and transportable homes
  • Increased use of panelisation in homes
  • 3D design and imaging tools to help designers plan homes in consultation with their clients and enable clients to experience and walk through their homes before building has even started
  • The use of simplified 3D design and modelling tools on builders’ websites to enable prospective clients to ‘design’ their own homes or customise existing home designs to meet their exact needs
  • The integration of 3D design and modelling software with plan and project management software to streamline the whole design and building process and reduce costs and building issues
  • Builders become project managers as more prefabricated home components and outsourced trades and specialists are utilised



3D printed houses such as this concept canal house in Amsterdam are getting closer to becoming a reality.


  • More tradespeople recognise the benefits of franchising and other group activities
  • On-demand apps for booking handymen, repair and maintenance specialists and renovators increase in popularity
  • Mobile apps and software revolutionise the industry as, unlike laptops, they can be used on-site
  • Growing use of robots for repetitive tasks such as bricklaying and painting
  • 3D printed houses (or components of houses) become a reality


What to do about it:


Many building companies have already become project managers and, in these days of trade licensing, greater building regulation and increased construction liability, have recognised clients’ needs for complete building solutions. Smart builders understand that being a technical expert does not necessarily make you good at business, and they’ve joined franchises or other schemes which provide them with branding, business systems and group buying benefits.


Some franchises in New Zealand which will be affected:


  • Signature Homes
  • Jennian Homes
  • GJ Gardner Homes




As an entrepreneur and franchise consultant, I have developed expertise in generating new business models and helping existing franchises to meet the changing demands of the market. It is said that the best way to predict the future is to create future, and I help franchises to do this through innovation, business model assessment and development, and change management.

I also use an exclusive technique called Disruption Future-Proofing which identifies possible ways in which businesses or franchises could be disrupted and models responsive strategies. By effectively disrupting themselves, businesses can potentially prevent disruption by others.

Contact me to talk about the benefits of Disruption Future-Proofing for your business.


Robin La Pere: Business, franchising and marketing consultant




Article by Robin La Pere, No Ordinary Business and Franchise Consultants

Contact me at robin@noordinary.co.nz.





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This article was written by Robin

La Pere of No Ordinary Business and Franchise Consultants.


Robin has a corporate and franchising background, but he is also an innovator and strategist. He offers a range of services, including strategic planning and business model assessment and development. He has recently launched a new service called Disruption Future-Proofing which seeks to prevent others from disrupting businesses and franchises by enabling them to effectively disrupt themselves first.


Robin maintains that to achieve effective change management in a franchise, it helps if your consultant has real hands-on experience in franchising and a deep understanding of the different motivations of franchisors and franchisees.


Robin is based in Auckland, New Zealand, but works with clients all over the world. To arrange for a free Initial Consultation, no matter where you're based, contact him at robin@noordinary.co.nz or use the Contact Form.







 


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