Getting to grips with big data is a crucial step to improving franchise success. That’s one of the messages from the International Franchise Association’s 2017 convention in Las Vegas.

Three trends were highlighted for the 47-strong Australian delegation: battle for market share, an evolving business model and big data.

Darrell Johnson, CEO of FranData, said “We’re at the tail end of economic recovery, which has been slow and choppy in the US. The battle for market share changes the dynamics and economics of working in this business model.”

Johnson said benchmarking is becoming prevalent across franchisors and suppliers.

There has been a business model evolution, he pointed out, as a consequence of labour issues which have made franchises more vulnerable.

The legal pressures are a by-product of a trend to refer to franchisees in a more equal tone, talking about franchisees as partners, talking about the same team and sharing, he said.

“We’re changing our language to what it should have been,” said Johnson.

There’s an increasing need for transparency in the franchising sector, both for prospective franchisees who have become more critical, and for the more cautious banking sector. Multi-unit franchisees in particular want to see evidence that the franchise model works.

External pressures also include the media and public perception of franchising as a business model, and the move towards highlighting winners and losers. Performance standards are important, Johnson explained.

He believes all these elements are converging together.

Big data is a vital component too of the franchise sector. In the US, tapping into the capabilities of profiling used for the 2008 presidential election has given businesses the opportunity to source precise demographics and produce a complete profile.

Assessing franchise performance so weaknesses and strengths are understood is a growing trend.

“People are making assumptions that are simply wrong – we have to counter this with good, accurate information,” said Johnson.