Winning the talent wars is critical, as is recruiting, retaining and even finding ways to outsource or automate certain tasks and processes.
In addition, the M&A and transaction space is still active, with record years for many owners. More seasoned operators are retiring, and others are leaving the industry as they see the potential operational nightmares in the future.
Those that are in position to acquire will have opportunities to be successful.
There have been many disruptors in the franchise industry in recent years, and that likely will continue. These disruptors include: preparing for continued supply chain deficiencies, continually increasing commodity costs and potential consumer pressure caused by inflation. There are even continued concerns about equipment availability for a new build or remodel.
Labor shortages continue, along with the higher wage trends and interest rate changes. This could also have a significant impact on cash flow. Challenges in financing of the next project or the buy/sell transaction could ultimately lead to fewer buyers on the market.
One of franchise owners’ biggest problems is attracting and keeping good workers. A good way to combat that is by offering a competitive wage structure, but that increases costs. Owners should do some research to see what similar franchise businesses are paying new and existing employees.
Other strategies include offering recruiting and retention bonuses to attract and keep good employees. Additionally, franchise owners can offer benefits and perks, such as discounts to local health clubs, tuition assistance or paid time off, just to name a few.
The challenges continue for these business owners. It’s a challenging time as regulation continues to shape the franchise industry. All things related to social infrastructure are at play. Wage and labor regulations are in the forefront, and employee safety regulations are increasing.
It’s also important to keep up with tax credits, revitalization funds and ever-changing federal and state tax laws.
The advice we give clients has remained constant through the years: Surround yourself with people who are smarter than you and those who have value in their perspective.
Take time to look at what’s going on around you. Work on your business, not in your business. Don’t be too busy or you could miss out. Partner with franchise consultants, accounting advisors, labor attorneys, tax specialists, insurance gurus and all those corporate resources you have available.
Franchise owners also need to be prepared from a valuation standpoint. Have an exit strategy for when things are going very well and for when they aren’t. We find many clients are just not aligned with the strategies needed to navigate the challenges or the opportunities that they have in front of them.
Contact us today and we will help you put these strategies in place and position your company for success.
Jason Saulters is the managing partner for HORNE’s Franchise focus area. He joined the firm in 2005 and helps guide clients through franchise industry challenges to help them achieve their full potential.