Discover How Harmonyze is Developing AI Agents to Help Franchisors Analyze Unstructured Data Effectively

For many businesses, franchising provides a robust growth strategy that avoids the complexities of mergers or organic expansion. With over 800,000 franchise businesses in the U.S., as reported by Statista, this number is forecasted to grow steadily each year. However, franchising—where a business model and brand are licensed to external operators—entails significant legal contracts, compliance issues, and extensive documentation, complicating an already intricate business framework.

Brooklyn-based Harmonyze aims to streamline this process for franchisors by harnessing the power of AI. Recently, the startup secured a $2 million pre-seed funding round led by Bowery Capital to enhance its innovative AI tools.

Harmonyze's custom AI agents operate within a secure private cloud database, bridging the gap between franchisors and franchisees. These intelligent agents communicate with one another and can execute over 200 tasks, from verifying vendor payments to ensuring timely insurance renewals. This capability not only enhances compliance—crucial in this heavily regulated industry—but also significantly reduces the time franchisors spend on administrative duties.

Founded in 2023 by childhood friends Gary Liskovich (CEO) and Jonny Greenspan (CTO), both of whom have backgrounds in tech startups, Harmonyze was born from a shared vision of transforming the franchising landscape. Liskovich expressed their initial interest in legal tech; however, they pivoted to focus on franchising due to its untapped potential and personal ties—Greenspan’s father owned a Totonno’s pizza franchise.

“Franchising is a term many recognize, yet few truly understand its depth; it represents 10% of U.S. businesses,” Liskovich shared. “Our exploration into franchising revealed vast amounts of unstructured data, which we believe AI can simplify and make actionable.”

Having exited stealth mode in early 2024, Harmonyze has since witnessed robust demand from franchisors. Liskovich noted that despite the growing interest, the team is strategically collaborating with a select group of clients to refine the platform based on user feedback and enhance its features.

The pre-seed funding will primarily be directed towards expanding the team, enabling further product development. The funding round also attracted attention from Focal.VC and several industry veterans involved in franchising.

Focusing on the franchisor rather than the franchisee was a strategic decision for Harmonyze. Since franchisors handle a larger volume of unstructured data, they represent a more suitable market for AI solutions. Liskovich envisions Harmonyze not just as a compliance tool but also as a platform that can help franchisors identify successful practices implemented by innovative franchisees—insights that could benefit the entire network.

“Franchisees are notorious for their innovative approaches; many successful ideas, like McDonald’s Filet-O-Fish, originated from them,” Liskovich explained. “We aim to analyze where top franchisees are excelling and leverage that knowledge to drive profitability across the board.”

The startup's emphasis on delivering specialized vertical SaaS services puts it at a unique advantage in the franchising sector. Unlike conventional approaches that may target specific franchise niches—from McDonald’s to Orangetheory Fitness—Liskovich points out that the internal operational structures across these businesses remain fairly similar.

Currently, competition in the franchise tech space is limited, a surprising trend considering the sector's size and consistent growth trajectory. Harmonyze is directing its efforts towards larger franchisors managing extensive networks rather than those with a smaller number of franchisees. However, Liskovich acknowledges the future potential of catering to smaller operations as well.

“We’re thrilled about the franchise market's expansion,” Liskovich remarked. “It’s not only sizable but growing at an extraordinary pace, representing a dynamic opportunity ahead.”