"To explore how franchisors are adapting and protecting owners' bottom lines in these turbulent economic times, Entrepreneur spoke with 20-year industry veteran Nick Powills, chief growth officer of Mainland, a Chicago-based communications and content marketing agency focused on franchising and multi-location businesses. He explains why franchising is inherently resilient, what smart franchisors are doing to cut costs and where the model still needs to improve."
"On the B2C side, franchising provides economies of scale. Even a 10-unit restaurant brand can negotiate better purchasing power for fixtures, supplies and food costs than an independent. That pulls pricing down and helps franchisees protect their margins. Smart brands start by engineering costs in their supply chain so franchisees are positioned for profitability from day one."
"Economic uncertainty is nothing new for entrepreneurs, but franchise systems are uniquely structured to soften the blow of cost pressures, tariffs and inflation. By leveraging economies of scale, innovating supply chains and maintaining strong lines of communication, franchisors can give franchisees a competitive advantage that independent operators often lack."
Franchise systems cushion franchisees from cost pressures by leveraging collective purchasing power, supply-chain innovations, and coordinated communications. Economic turbulence often drives prospective owners toward franchising as a path to stability after job disruption. Even modest multi-unit brands can negotiate lower costs for fixtures, supplies, and food, helping protect margins for individual operators. Smart franchisors proactively design supply chains and cost structures so new franchisees reach profitability sooner. Tariffs and inflation typically affect supply chains first, making centralized negotiation and strategic procurement critical to preserving franchisee bottom lines during economic shocks.
Read at Entrepreneur
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