Harmonyze Aims to Develop AI Assistants for Franchisors to Decode Unstructured Data

For numerous enterprises, franchising offers a straightforward avenue for expansion without the need for mergers or organic growth. The United States is home to over 800,000 franchise operations, a figure reported by Statista, which is anticipated to rise annually. Nevertheless, entering into franchising entails numerous contracts, adherence to legal standards, and significant documentation, all of which add layers of complexity to an already intricate business strategy.

Based in Brooklyn, Harmonyze aims to assist franchisors in managing these complexities through AI, having recently secured a $2 million pre-seed investment spearheaded by Bowery Capital to enhance its AI-driven solutions.

Harmonyze has developed specialized AI agents that operate within a secure cloud database, facilitating communication and task execution between franchisors and their franchisees. Capable of performing over 200 functions, such as verifying correct payments to vendors or ensuring timely insurance renewals, these agents ease the regulatory compliance burden for franchisors in a sector known for its stringent regulations. This ultimately saves time on administrative duties.

The venture was inaugurated in 2023 by long-time friends Gary Liskovich, CEO, with a history in product management at startups like EvolutionIQ and SmartAsset, and Jonny Greenspan, CTO, with engineering experience at Salesforce among others. The co-founders opted to focus on the franchising sector after recognizing the vast untapped potential and owing to a personal tie — Greenspan’s father once owned a Totonno’s Pizza franchise.

Liskovich commented on the sizable yet overlooked franchise sector, noting, “Franchising is a well-known term, but deeply investigated by few; it represents 10% of businesses in the U.S.” He highlighted the massive volume of unstructured data within franchising that AI can decipher and render useful.

Since Harmonyze emerged from stealth mode in early 2024, it has witnessed solid interest from franchisors. Liskovich revealed that while demand is high, the company is initially partnering with a select group to garner feedback and refine its offerings and functionalities continuously.

The infusion of capital from the pre-seed phase will primarily fund new hires to propel product development further, with contributions from Focal.VC and several franchise industry insiders.

The strategic decision to cater to franchisors rather than franchisees was influenced by the greater challenge of managing unstructured data faced by franchisors, which leans towards an AI-based solution, according to Liskovich. He aspires for Harmonyze to identify and propagate effective business strategies from the franchisees across the network.

“Franchisees are often at the forefront of innovation within the system,” Liskovich noted. He pointed to the creation of the Filet-O-Fish at McDonald’s as a prime example of franchisee innovation. His goal is to uncover where such innovation is occurring and leverage this knowledge to enhance profitability across the board.

The startup’s success, Liskovich believes, stems from its focus on offering comprehensive SaaS solutions to franchisors, rather than zeroing in on specific franchising sectors. He contends that despite the diversity of businesses under the franchising umbrella, their internal structures share significant similarities.

The franchise industry, despite its considerable size and consistent growth, faces surprisingly low levels of competition — a fact that bodes well for innovative entrants like Harmonyze.

Harmonyze targets franchisors overseeing extensive networks, differentiating from those managing just a few outlets. While there’s potential to eventually cater to smaller operators, the current focus remains on servicing the substantial segment of larger networks.

“We’re enthusiastic about the franchise market’s expansion,” Liskovich said. “It’s not only vast but also experiencing immense growth. We see this as an ever-increasing opportunity.”