Even outside of industries and business sectors that promote technological advancements, we’re beginning to hear more and more about artificial intelligence (AI) and how it will impact our lives. For most consumers, AI and machine learning tools and resources are still widely perceived as something we’ll experience in the future. At the moment, our dual perception seems to be that whatever AI is – or will become – it’s either something we’ll all greatly benefit from, or something with the potential to turn against us in malicious ways. Then, all of the sudden, ChatGPT arrived on the scene. And with it, the average person began to understand, in layman’s terms, how AI can be applied to make our lives easier and more productive. Based on user prompts, ChatGPT can answer questions, find data and statistics, write copy, and even hold a conversation. One day, we may look back and recognize that ChatGPT was the first mainstream resource tool that helped the general public gain a practical understanding of how AI works. And, more importantly, how AI can work for them to make their lives easier and more productive. Some might say that’s a watershed moment.


These days, instead of being confined to the world of network computing and IT services, artificial intelligence and the power of machine learning is beginning to infiltrate individual industries and business sectors across the board. And while not the earliest of adopters, the franchising industry has begun to embrace this machine learning technology and understand how it can benefit both franchisees and franchisors alike. Some industry experts are calling it an inflection point. The time has come for a frank discussion of where we stand with this new technology, so we can all gain a better understanding of how AI is being applied to advance the world of entrepreneurial business ownership.


How AI is Being Applied in the Franchising Industry

In essence, artificial intelligence and machine learning are technologies that are designed to solve problems. But these technologies are also built to achieve these solutions much quicker and with more accuracy. The core benefit of applying AI in franchising, whether you happen to be a franchisee or franchisor, is essentially the same – to gain a competitive advantage in the marketplace. Here’s a look at how both sides are using the technology of tomorrow to get a leg up today:


Franchisors – no doubt you’ve heard brands breathlessly extoll the virtues of “big data.” Franchisors have reams and reams of data about their business model, their ideal ownership candidate, and the metrics that measure their financial performance in comparison to the competition. The latter is one of the most convincing arguments to be made in the entrepreneurial selection process. What AI is doing is helping franchisors unlock the potential that resides in their data and how predictive analytics can be applied to make better and more informed decisions about the brand’s direction and performance. AI is helping franchisors consolidate these data points and provide the network of franchisees in their system with actionable intelligence, tools, and resources – all of which are designed to have a positive impact on individual operations. This includes simple-to-understand benefits such as automating tasks, improving customer service applications, and enhancing the brand awareness and marketability of the very products and services that franchisors offer consumers.


Franchisees – the process of searching for a suitable franchise to own can be an overwhelming task. That’s not so surprising when one considers there are between three and four thousand different franchise business models on the market today. With so much information out there, not to mention the intricate steps involved in the franchise buying process, many entrepreneurial candidates simply have no idea where to start. Now, thanks to the application of AI that’s designed to enhance and improve the search process, things just got a whole lot easier. Now in beta-testing format, after one and a half years of development, there’s a new AI platform that basically functions like a prequalification tool. By asking questions and answering user-directed prompts, any franchise candidate can obtain answers and guidance based on decades and decades of analytical knowledge. And that, in turn, can help them make more informed decisions about their own business ownership preferences. First and foremost, this AI tool can use its predictive analysis feature to determine if you’re cut out for franchise ownership in the first place (hint: not everyone is). If franchising is a fit, users can then enter their personal details and information to narrow down only the most suitable business models – ones that align with their own strengths, experience, and level of financial tolerance. But the true beauty and functionality of this newly minted AI tool can be found in its simplicity. Every individual user’s session is personal, confidential, and self-directed. In a way, this new AI-based technology tool operates like Match.com, synchronizing individual entrepreneurs with their most ideal franchise opportunities.


The common goal that franchisors and franchisees share isn’t difficult to comprehend. Ultimately, they both want to succeed in the marketplace. As a franchise executive who’s worked in the industry for well over two decades, I’m proud to see how AI is being integrated and applied throughout the franchising industry to ensure this common goal will one day soon be that much easier to achieve. 


Blake Martin owns FranNet of The Heartland, a franchise brokerage, sales, and consulting firm that provides coaching and consultation for entrepreneurs and small business owners. He’s a Certified Franchise Executive (CFE) and a graduate of the University of Michigan’s Psychology Program. During his two decades in the franchising industry, Blake has provided practical advice in building franchise systems from the ground up, while helping hundreds of entrepreneurial clients become small business owners. He can be reached at bmartin@frannet.com