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The Impact of AI on Franchising

Artificial intelligence (AI) is exaggerated in the movies where we see machines taking over the world; however, it is not that complicated or dramatic. As a matter of fact, artificial intelligence is already embedded in our lives in various forms. For instance, digital assistants in our mobile phones such as Siri, Google Assistant, and Alexa are a good example of how AI revolves around us. Even online maps, ads and our music playlists leverage AI to ease our lives.

When we talk about franchising, AI offers a multitude of advantages. The relationship between a franchisor and franchisee plays a pivotal role in the success of a franchise. Using AI to select an optimal site, manage merchandising and logistics, and for advertisement purposes can substantially improve the potential of a franchise to thrive and earn profits. Here’s how.

Site selection

Deciding a location for a franchise is one of the most crucial factors when it comes to running a successful franchise business. Previously the decision of site selection was taken on macro-trends, however, it does not take all the factors that affect the franchises in the UK into account and often provides subjective conclusions.

Artificial Intelligence resolves this issue by using algorithmic decision making, computing a large amount of data sets to provide the meaningful insights. For instance, they can input data relating to foot traffic, trends, sales data, points of interests, and competitor locations, among several variables to calculate with a greater level of accuracy. With the brainpower of Artificial Intelligence, franchisees are able to determine an optimal location.

Advertising and sales

When it comes to marketing, AI can help franchisees to refine their most prized possession: brand awareness. Franchisors can use AI for targeted advertising to maximize the effectiveness of their marketing campaign.  For instance, coffee franchises will be able to target ads to nearby customers who have recently searched for coffee. Food franchises UK are not the only one who can take advantage of AI; automotive, tech, FMCG’s, and perhaps every industry can reap benefits by using targeted marketing and maximize their revenue.

Major advertisement platforms such as Facebook and Google use AI for effective and smart ad segmentations which provide a high degree of control over the responses and interactions on their ads. Machine intelligence also helps in the prediction of consumer behavior and analyzes buying patterns, which not only helps in improving sales but also streamlines their business operations thus improving efficiency.

Merchandising and logistics

Managing logistics and merchandising, especially for new franchises UK can particularly pose several challenges. Artificial Intelligence allows a franchisor who uses a POS system and maintains CRM data to gain valuable insights by parsing a large amount of operational data. This optimizes the logistical process and also helps in the identification of frauds and errors.

Companies with a high amount of logistical requirements such as DHL and Amazon are investing heavily in AI-driven logistic chains to optimize their inventory management and managing deliveries. Franchises UK can also benefit from AI, allowing them to manage their inventory more effectively and reducing the storage costs, which will lead to greater profitability.

Final Words

In this fast-paced technological environment with constant advancements in AI, it is imperative for all businesses and especially franchises UK to start seeking ways to incorporate AI in their business to remain competitive and thrive in the ever increasing competition and unpredictable business landscape.

Find the work-life balance you always wanted. Get in touch with Franchise UK for more information on available franchise opportunities in the UK and how to become a franchisee.

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