Franchising is a strong progress technique for companies searching for fast growth with out bearing the total burden of capital funding and operational prices. Nonetheless, managing franchises comes with advanced challenges that demand a fragile stability between management and suppleness. Harmonyze permits franchisors to function profitable franchise networks with AI brokers. The platform automates and centralizes each authorized and operational compliance and monitoring and reporting, whereas facilitating coordinated expertise deployment throughout the franchise community, permitting for fast experimentation. For quickly scaling franchisors, sustaining model consistency and high quality throughout a number of places is essential. Harmonyze helps guarantee clients have a constant expertise aligned with model requirements. By automating operational duties throughout the franchise community, the platform not solely generates value financial savings for each franchisors and franchisees but additionally frees up franchisors to concentrate on strategic, revenue-generating initiatives.
AlleyWatch caught up with Harmonyze CEO and Cofounder Gary Liskovich to study extra in regards to the enterprise, the corporate’s strategic plans, latest spherical of funding, and far, way more…
Who have been your traders and the way a lot did you elevate?
Harmonyze profitable closed greater than $2M in pre-seed funding. The spherical was led by Bowery Capital, with significant participation from Focal.VC, in addition to particular person traders that embrace CXOs at franchisors, AI firms, and personal fairness companies.
Inform us in regards to the services or products that Harmonyze provides.
Harmonyze makes it simpler for franchisors to run distinctive and worthwhile companies. Utilizing AI brokers, Harmonyze automates operational and compliance duties, centralizes network-wide monitoring and reporting, and permits fast two-way innovation between franchisor and franchisee. This modern answer not solely drives down prices for franchisors, but additionally frees up their groups to concentrate on strategic, revenue-generating actions, finally bettering margins.
What impressed the beginning of Harmonyze?
My cofounder, Jonny Greenspan, and I grew up in Brooklyn collectively, the place Jonny’s dad was a franchisee. We didn’t comprehend it on the time, however this expertise began to form our data of the franchise {industry}, which might finally encourage Harmonyze. After Jonny and I graduated school and independently labored at quite a few expertise startups, we began to mess around with constructing AI for authorized and compliance-related issues. As we analyzed which industries would profit most from this answer, we remembered Jonny’s dad’s franchising expertise. Scaled franchise networks are extremely advanced and generate a powerful quantity of unstructured knowledge — the proper surroundings for AI to unlock worth. Over the previous yr we’ve finished intensive discovery with franchisors and the response and preliminary industrial traction has been overwhelmingly thrilling.
How is Harmonyze totally different?
Harmonyze is an AI-first firm led by skilled technologists and purpose-built for franchisors’ operations, from coordinating compliance duties to staying on high of assorted rules. Our AI brokers interpret the huge quantities of unstructured knowledge that movement via franchise networks after which automate hundreds of in any other case guide processes. After growing an in depth understanding of a franchisor’s enterprise (Edible Preparations is kind of totally different than the UPS Retailer franchise, for instance), we deploy the correct set of AI brokers to a safe, personal cloud. Right here, these brokers full and coordinate duties between one another through a proprietary framework we developed particularly to mirror the way in which data is handed all through franchise techniques.
What market does Harmonyze goal and the way huge is it?
Harmonyze is purpose-built for franchisors — an important sector of the economic system, however one which has lengthy been underserved by expertise startups. Populars manufacturers like Orange Idea, ACE {Hardware}, the UPS Retailer, and nearly each fast service restaurant function franchise fashions. By 2028, the franchise market is forecasted to achieve roughly $5 trillion globally, representing a ten.41% CAGR from 2023 to 2028. The operations leaders that run these franchise networks are charged with coordinating hundreds of duties throughout numerous places, usually on the expense of essential strategic work that elevates the model. Harmonyze’s AI is purpose-built for franchisors, and helps them considerably streamline and simplify the complexities of operating profitable companies.
What’s your corporation mannequin?
Harmonzye is a subscription mannequin with pricing dependent upon the dimensions of a franchisor’s community.
How are you making ready for a possible financial slowdown?
The franchise {industry} is robust and rising quickly around the globe. An financial slowdown, nevertheless, would pressure franchisors to do much more to assist their franchisees, additional burdening their groups in consequence. Harmonyze is thoughtfully designed to automate hundreds of in any other case guide duties, saving prices whereas liberating up groups to concentrate on the kinds of strategic, revenue-generating actions which can be particularly important throughout difficult durations.
What was the funding course of like?
We have been very organized in our fundraising method, which resulted in a simple and fast course of general. I imagine a part of our success was how we framed the franchisor-specific drawback after which defined why skilled technologists, versus industry-specific veterans, have been the perfect to unravel it utilizing AI.
What are the most important challenges that you simply confronted whereas elevating capital?
Whereas everybody, together with VCs, store from and revel in franchise companies on a weekly, if not every day, foundation, there’s not a deep understanding of their distinctive complexities. We needed to do numerous educating throughout the fundraising course of to beat this. Nonetheless, this additionally gave us an ideal alternative to reveal simply how nicely we understood the issue we have been fixing, which each and every VC desires to see. As an early-stage firm, we have been additionally constructing merchandise and onboarding new shoppers as we have been fundraising — doing each concurrently was difficult. Lastly, many VC groups are extremely distributed right now, which meant digital conferences have been the norm. Video calls have their advantages, but it surely’s not all the time straightforward to do a considerate chemistry test just about. It was actually essential that we labored with the correct traders that may assist us and our progress, so we have been finally thrilled to associate with Bowery Capital and Focal.VC.
What elements about your corporation led your traders to put in writing the test?
As soon as traders understood the complexities of the franchise {industry} and the way massive this sector of the economic system is, they have been energized by the chance for innovation. My co-founder and I are each extremely technical and have a confirmed monitor report of constructing AI merchandise for enterprise clients, which instilled confidence within the traders that we have been the correct leaders to deal with this problem. And at last, Jonny and I benefited from being finest pals since center college — we have been in lock-step all through the complete course of.
As soon as traders understood the complexities of the franchise {industry} and the way massive this sector of the economic system is, they have been energized by the chance for innovation. My co-founder and I are each extremely technical and have a confirmed monitor report of constructing AI merchandise for enterprise clients, which instilled confidence within the traders that we have been the correct leaders to deal with this problem. And at last, Jonny and I benefited from being finest pals since center college — we have been in lock-step all through the complete course of.
What are the milestones you intend to realize within the subsequent six months?
With our pre-seed spherical closed, we’re laser-focused on increasing the variety of franchisors we work with and deploying an order of magnitude extra AI brokers that clear up their issues.
What recommendation are you able to supply firms in New York that wouldn’t have a recent injection of capital within the financial institution?
Make investments the useful resource you do have — your time — in buyer discovery and striving for excellence. This prices nothing and can return dividends by shaping a priceless product and sharpening your pitch to traders.
The place do you see the corporate going within the close to time period?
Our focus is on working carefully with extra enterprise design companions and ambitiously growing new AI brokers that clear up their most urgent challenges. To assist these targets, we are going to proceed to develop our group with a concentrate on engineering and industrial roles.
What’s your favourite summer time vacation spot in and across the metropolis?
Each Jonny and I grew up in South Brooklyn, so we love Coney Island! We extremely advocate stopping by Tottono’s Pizzeria and Nathan’s whenever you’re within the neighborhood.
