On our podcast we recently sat down to explore how franchising is changing with insights from Michael Seid. In a world where franchising continues to evolve, Michael Seid, the managing director of MSA Worldwide, shares his insights on the modern landscape of franchising and the significant shifts that are occurring.
Rethinking Franchise Agreements
Michael highlights what he sees as a certain stagnation in traditional franchise agreements. He points out that while many franchise agreements are still structured around single and multi-unit agreements, they often overlook the reality that over 50% of franchise units are owned by multi-unit franchisees.
“We’re developing today what we look at as franchising by class.”
This notion encourages a more nuanced approach, suggesting that agreements should reflect the diverse capabilities and resources that multi-unit franchisees bring to the table. The goal is to tailor agreements that recognize the differences in operational needs and contributions of various franchisee classes.
The Role of Technology and AI
As we navigate through an age dominated by technology, Michael emphasizes the need for franchisors to adapt. He notes that site selection and training can be optimized through technology, reducing the reliance on traditional methods.
“We can find out a lot about that location just by going to the internet and reviews.”
This shift by a franchisor, notes Michael, would not only streamline operations but also empower more franchisees to take ownership of their management processes.
New Perspectives on Franchisees and Franchising
In the episode, we explore with Michael ideas about how franchising could be modified to fit contextual practices more efficiently, and how franchising can be used for public good such as health clinics in the social franchising context, among other topics.
The conversation with Michael Seid sheds light on the pressing need for the franchising industry to further adapt to the current business landscape. By acknowledging the complexity and diversity within franchise operations, both franchisors and franchisees can work together to create a more efficient and effective system. As Michael puts it: “We should be redesigning franchising to match up to what we’re doing now anyway.”
For a deeper dive into these insights, listen to the full episode where Michael discusses his upcoming books and more about the future of franchising.