The franchise industry is booming, and it’s no secret why. Franchises offer an opportunity for entrepreneurs to own their businesses with the security of a well-known and trusted brand behind them. But what about the future of franchising? What impact will new forms of digital property, or non-fungible tokens (NFTs), have on this thriving industry? In this blog post, we will explore five ways that NFTs are changing the face of franchising in the United States.
Firstly, NFTs in the franchise industry are creating a new revenue stream. With the ability to tokenize assets, franchises can now sell digital versions of their products and services. This opens new markets for franchisees and allows franchisors to generate additional revenue. One example of this is the NBA Top Shot platform. NBA Top Shot is a blockchain-based platform that allows fans to buy, sell, and trade official video highlights of games. The platform launched in October 2020 and has since generated over $230 million in sales.
Secondly, NFTs are changing franchising by making it more accessible. By removing the need for physical storefronts, NFTS makes it possible for people to own a franchise without worrying about the high overhead costs. This is especially beneficial for those who live in rural areas or otherwise might not have access to a traditional brick-and-mortar franchise. For example, according to the United States Census Bureau, over 46 million people live in rural areas. That’s nearly 15% of the population! And with NFTs, they can now have access to franchises that they otherwise would never have had.
Thirdly, NFTs are giving rise to new types of franchises. We are already seeing the emergence of digital-only franchises, such as those in the video game industry. For example, “Fortnite” has spawned several professional gamers who compete for prize money in tournaments. These gamers have built up followings on social media, and some have even signed endorsement deals. Other games, such as “League of Legends” and “Counter-Strike: Global Offensive,” have also created professional leagues with sizable prize pools. Franchises like these didn’t exist a few years ago, but they are now a major force in the gaming industry, thanks to NFTs.
Fourthly, NFTs are making franchising more sustainable. By eliminating the need for paper documents and other physical materials, NFTs can help reduce a franchise’s carbon footprint. For example, the US Franchise Association estimates that each new franchise location generates about five tons of paperwork. If all of that paperwork were replaced with NFTs, it would save approximately 40 trees per year per location. In addition to saving trees, NFTs help save water and energy. Paper production requires large amounts of water and energy, which have a significant environmental impact.
Finally, NFTs have the potential to fractionalize ownership and make it more democratic. For example, let’s say that you own a piece of digital art that you created. You can now sell that artwork as an NFT, and people can buy fractions of it. So, if someone buys a tenth of your artwork, they own that tenth, and you still own the other nine-tenths. Imagine that same scenario, but with a franchise like McDonald’s. Instead of one person owning the entire franchise, people could buy fractions of it through an NFT. This would make franchising more democratic and allow more people to invest in franchises.
These are just a few of the ways that NFTs are changing the franchise industry. It’s clear that they are having a major impact on the industry, and, likely, this impact will only grow in the years to come. So if you’re thinking about starting a franchise, be sure to keep these trends in mind. They could very well shape the future of franchising as we know it.
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