FCA Victoria State Conference: The time is now
AUTHOR: Taylor Fielding, Director - TFM Digital
100+ of the FCA’s members packed the RACV City Club Melbourne this past week, for a full day of keynote sessions on current trends, along with panels and roundtables which unearthed key insights for franchisors. The event came off the back of record numbers at Melbourne Franchise Expo recently; interest in the sector remains very high.
There were many highlights from the second in the Stronger Together event series, but one common theme stuck out which was the urgency of time.
Challenges remain
We heard from CEOs across sectors, that a number of challenges have impacted their businesses across the past 12 months. One of the memorable examples from San Churro’s Kerri Waine, focused on how to manage your outlook when dealing with surging supplier prices, chocolate being severely affected.
This is when leadership needs to be clear in its vision, set the bar high for teams and pivot when necessary. All panellists agreed the most important thing to do as leaders is to align with Purpose, Mission and Values. All the way from the top to the bottom.
Money is still too tight to mention
There is no silver bullet, when it comes to ‘Unlocking funding for franchising’ unfortunately. Lending is becoming a longer process, whether with one of the Big 4 (we had half on stage with both NAB and ANZ on the panel), or with other lenders like Judo Bank and Bluerock Financing.
All aimed to convey how franchisors can get their potential franchisees lending ready, which included ensuring they could explain their entire group income (e.g. partner’s earning income). As panellist Rebecca Evans from Judo Bank explains: “There have never been more options available for good quality clients to raise funding - prepare your story, capital and supporting data and go for it!”
A slowdown but hope is coming
Alan Oster, NAB’s Group Chief Economist set the scene early in the morning, giving a frank assessment of the severity of our current economic slowdown.
All in our sector will have felt the impact of rising rent costs, disruption to supply chains, and geopolitical uncertainty with the Ukraine war and unrest in the Middle East. Indeed the economic forecast for the rest of 2024 is still very slow, with falling consumer confidence and cost of living still high.
However there is hope, with data indicating cuts to start in H1 2025, down to 3% by mid 2026. And NAB’s Business Survey showed conditions are a touch below run averages right now, however confidence and increasingly forward orders are weaker. Price pressures, even in retail are easing, better predictions for GDP growth are coming into the next year or two.
Now is the time to plan and invest
In one of the roundtables, focusing on Network Growth, the discussion turned to the quality of leads. How to nurture leads, and create content aligned to where they are in journey is paramount, especially when franchise lead times are already 6-9 months, and due to issues with financing and market outlook, could be longer right now.
Nurturing and remaining front of mind is key.
We know at TFM from the Future Franchisee report that despite extended lead times, now is the time for franchisors to invest and cultivate that solid lead pipeline. In fact, that same report indicated that while the pool of High-Value Franchisee Prospects (HVFP) is down (11%) over the past quarter, the motivation for those still in the market remains high.
Personalising customer content, and creating tailored messaging is key. David Mansfield outlined how his company has built an AI-powered nurture tool to help automate the process.
Indeed the panel I chaired into marketing in a digital age, looked at the benefits of first party data, highlighting the unique importance now of loyalty programs (both for repeat customers and NPS).
While video and organic content is still a key medium for attracting both customers and franchisees, experimentation on TikTok is where a lot of brands are starting to focus, given the high penetration rate for new starters on the platform.
Director of Marketing, Jodi Murray-Freedman explained that Tik Tok was a big surprise for Bakers Delight. “Our head baker was on it before we were and we noticed his behind the scenes videos were getting a lot of traction - some as high as 35 million views.” In just over 18 months, the bakery franchise gained over 55k followers and continues to grow, but it’s not without its pitfalls she explained: “...we’ve had to update and manage our social media policies to align with the changing dynamics of the platform. It’s now part of every new team member’s induction when they join the business.”
Media fragmentation is increasing further, meaning that as marketers we’re now chasing the higher attention formats. Testing and iterating continues to mix the art of creative with the science of measurement/attribution data. This relevant data to drive growth offers franchises the growth blueprint to succeed in the coming months/years.
Enhancing intelligence
No event right now would be complete without its own dedicated session on AI, and the biggest thing to come out of our franchise-focused one was on data privacy. We’ve seen in the recent Oracle case, the impact that using 3rd party data and passing it off as your own marketing data can have. Additionally our own Government is slated for updates to our Privacy laws before the end of the year.
There are other live use cases for the technology across customer engagement and predictive analytics which help with decision making. Automating the manual processes of the past is already here.
Yet the message from all is simple, be careful what you’re putting into the platforms that could be sensitive.
Some AI platforms are starting to shift behavior and understand what people WANT to hear, so some results are starting to come back with ‘desired’ but ultimately incorrect answers. Not to mention the AI hallucinations which still worry those in the industry.
In all, a lot of learnings about how to approach the short-medium term.
Planning your media and marketing messages to continue franchisee prospects along the journey is vital, especially with all of the delays in the market, between financing and business confidence which remain below pre-pandemic levels. The data for targeting your High-Value Franchisee Prospects is still available, to know where to target your audience. And working with reliable suppliers, to avoid avoidable growth disruption to your franchise as the outlook improves is highly advised from the experts on show at VIC series.