Franchising is a powerful growth strategy, with over 800,000 franchise businesses in the U.S. alone, according to Statista. As the sector continues to expand, franchisors face increasing challenges in managing contracts, legal compliance, and documentation. Brooklyn-based startup Harmonyze aims to address these challenges by leveraging AI to help franchisors make sense of the vast amounts of unstructured data inherent in the industry.
Harmonyze has recently secured a $2 million pre-seed funding round, led by Bowery Capital, to further develop its AI-driven platform. The company’s innovative AI agents operate within a private cloud database, serving as a bridge between franchisors and franchisees. These agents can communicate with each other to perform over 200 tasks, such as verifying payments to product vendors or ensuring that franchisees are up to date on insurance renewals. By automating these processes, Harmonyze helps franchisors maintain compliance in the heavily regulated franchising industry while reducing the time spent on administrative tasks.
Founders and Market Opportunity
Harmonyze was founded in 2023 by Gary Liskovich, CEO, and Jonny Greenspan, CTO, both childhood friends with extensive experience in the tech industry. Liskovich, a former product manager at startups like EvolutionIQ and SmartAsset, and Greenspan, a former engineer at Salesforce, initially explored opportunities in the legal sector before pivoting to franchising. Their decision was driven by the market’s untapped potential and a personal connection—Greenspan’s father owned a Totonno’s pizza franchise.
“Franchising is a term everyone knows, but few have deeply explored. It constitutes 10% of U.S. businesses,” Liskovich explained. “The franchising space is filled with unstructured data, and we believe AI can transform it into actionable insights.”
Early Success and Future Plans
Harmonyze exited stealth mode in early 2024 and has seen strong demand from franchisors since. Despite this demand, the company is initially working with a select group of customers to refine its product and features. Liskovich emphasized that the bulk of the pre-seed funding will go toward hiring, enabling Harmonyze to continue enhancing its AI-driven platform.
The startup’s focus is on franchisors rather than franchisees, as the former typically deals with significantly more unstructured data. By targeting franchisors, Harmonyze aims to help them identify innovative practices at individual franchise locations that can be scaled across the entire network. “Franchisees are known for their innovation,” Liskovich noted. “For example, McDonald’s Filet-O-Fish was the brainchild of a franchisee. We want to pinpoint where your top franchisees are innovating and use that knowledge to boost profitability across the board.”
Competitive Landscape and Market Potential
Harmonyze’s success so far can be attributed to its focus on creating vertical SaaS solutions tailored to franchisors as a whole, rather than targeting specific sectors within franchising. Whether it’s fast food giants like McDonald’s, fitness chains like Orangetheory Fitness, or retail outlets like UPS stores, the internal structure of franchised businesses is remarkably similar, making Harmonyze’s solution broadly applicable.
Despite the size and growth of the franchising sector, there is currently limited competition in the space. Harmonyze is initially targeting franchisors with large networks of franchisees but plans to eventually develop technology that caters to smaller franchisors as well.
“We’re excited about the expansion of the franchise market,” Liskovich said. “It’s not just large but growing at an incredible rate. That growth represents a massive opportunity.”
Harmonyze is poised to become a key player in the franchising industry, helping franchisors harness the power of AI to manage their operations more efficiently and effectively.