According to a report from the Chartered Professional Accountants of Canada (CPA Canada), inflation and the supply chain are currently the top challenges to the growth of the Canadian economy. This may leave you wondering about the potential impact on franchises and franchisees.
The extent of the impact depends largely on the type of franchise you are involved in. Franchises that focus on delivering services or sharing skills, such as those in sports, consulting, and cleaning, are less likely to be affected than those reliant on the buying and selling of physical goods.
Should You Be Worried?
If you are part of a goods-based franchise, it is wise to discuss potential goods shortages or price increases with your mentors or suppliers. This information will be valuable to share with your customers.
The ongoing conflict in Ukraine is a major factor affecting the supply chain, impacting the availability of goods such as precious metals, wheat, fertilizer, oil, and gas. If your franchise’s supply chain does not depend on European inputs, you might experience more stability.
What Actions Should You Take?
Customers tend to remain loyal to brands they like and trust, as long as you are transparent with them about any expected shortages or price increases.
Franchisees can also gain public favor by focusing on sustainable practices to reduce emissions and support the transition to a low-carbon economy. Consider actions such as reducing or changing packaging to make it more recyclable, compostable, or reusable; utilizing more economical delivery methods; and selling products locally, perhaps at trade fairs or through home demonstrations. These efforts not only enhance your local profile but also provide customers the chance to buy directly from you, eliminating shipping costs.
Utilize your franchise’s social media profiles to communicate and engage with your customers. Mailing lists are also effective. Keeping your regular clients informed helps maintain their loyalty and makes them feel valued.