Franchising is a powerful growth strategy for businesses seeking rapid expansion without bearing the full burden of capital investment and operational costs. However, managing franchises comes with complex challenges that demand a delicate balance between control and flexibility. Harmonyze allows franchisors to operate successful franchise networks with AI agents. The platform automates and centralizes both legal and operational compliance and monitoring and reporting, while facilitating coordinated technology deployment across the franchise network, allowing for rapid experimentation. For rapidly scaling franchisors, maintaining brand consistency and quality across multiple locations is crucial. Harmonyze helps ensure customers have a consistent experience aligned with brand standards. By automating operational tasks across the franchise network, the platform not only generates cost savings for both franchisors and franchisees but also frees up franchisors to focus on strategic, revenue-generating initiatives.
AlleyWatch caught up with Harmonyze CEO and Cofounder Gary Liskovich to learn more about the business, the company’s strategic plans, recent round of funding, and much, much more…
Who were your investors and how much did you raise?
Harmonyze successful closed more than $2M in pre-seed funding. The round was led by Bowery Capital, with meaningful participation from Focal.VC, as well as individual investors that include CXOs at franchisors, AI companies, and private equity firms.
Tell us about the product or service that Harmonyze offers.
Harmonyze makes it easier for franchisors to run exceptional and profitable businesses. Using AI agents, Harmonyze automates operational and compliance tasks, centralizes network-wide monitoring and reporting, and enables rapid two-way innovation between franchisor and franchisee. This innovative solution not only drives down costs for franchisors, but also frees up their teams to focus on strategic, revenue-generating activities, ultimately improving margins.
What inspired the start of Harmonyze?
My cofounder, Jonny Greenspan, and I grew up in Brooklyn together, where Jonny’s dad was a franchisee. We didn’t know it at the time, but this experience started to shape our knowledge of the franchise industry, which would eventually inspire Harmonyze. After Jonny and I graduated college and independently worked at numerous technology startups, we started to play around with building AI for legal and compliance-related problems. As we analyzed which industries would benefit most from this solution, we remembered Jonny’s dad’s franchising experience. Scaled franchise networks are incredibly complex and generate an impressive amount of unstructured data — the perfect environment for AI to unlock value. Over the past year we’ve done extensive discovery with franchisors and the response and initial commercial traction has been overwhelmingly exciting.
How is Harmonyze different?
Harmonyze is an AI-first company led by experienced technologists and purpose-built for franchisors’ operations, from coordinating compliance tasks to staying on top of various regulations. Our AI agents interpret the vast amounts of unstructured data that flow through franchise networks and then automate thousands of otherwise manual processes. After developing a detailed understanding of a franchisor’s business (Edible Arrangements is quite different than the UPS Store franchise, for example), we deploy the right set of AI agents to a secure, private cloud. Here, these agents complete and coordinate tasks between each other via a proprietary framework we developed specifically to reflect the way information is passed throughout franchise systems.
What market does Harmonyze target and how big is it?
Harmonyze is purpose-built for franchisors — a vital sector of the economy, but one that has long been underserved by technology startups. Populars brands like Orange Theory, ACE Hardware, the UPS Store, and almost every quick service restaurant operate franchise models. By 2028, the franchise market is forecasted to reach approximately $5 trillion globally, representing a 10.41% CAGR from 2023 to 2028. The operations leaders that run these franchise networks are charged with coordinating thousands of tasks across countless locations, often at the expense of important strategic work that elevates the brand. Harmonyze’s AI is purpose-built for franchisors, and helps them significantly streamline and simplify the complexities of running successful businesses.
What’s your business model?
Harmonzye is a subscription model with pricing dependent upon the size of a franchisor’s network.
How are you preparing for a potential economic slowdown?
The franchise industry is strong and growing rapidly around the world. An economic slowdown, however, would force franchisors to do even more to support their franchisees, further burdening their teams as a result. Harmonyze is thoughtfully designed to automate thousands of otherwise manual tasks, saving costs while freeing up teams to focus on the types of strategic, revenue-generating activities that are especially essential during challenging periods.
What was the funding process like?
We were very organized in our fundraising approach, which resulted in a straightforward and quick process overall. I believe part of our success was how we framed the franchisor-specific problem and then explained why experienced technologists, versus industry-specific veterans, were the best to solve it using AI.
What are the biggest challenges that you faced while raising capital?
While everyone, including VCs, shop from and enjoy franchise businesses on a weekly, if not daily, basis, there is not a deep understanding of their unique complexities. We had to do a lot of educating during the fundraising process to overcome this. However, this also gave us a perfect opportunity to demonstrate just how well we understood the problem we were solving, which every VC wants to see. As an early-stage company, we were also building products and onboarding new clients as we were fundraising — doing both simultaneously was challenging. Finally, many VC teams are highly distributed today, which meant virtual meetings were the norm. Video calls have their benefits, but it’s not always easy to do a thoughtful chemistry check virtually. It was really important that we worked with the right investors that would support us and our growth, so we were ultimately thrilled to partner with Bowery Capital and Focal.VC.
What factors about your business led your investors to write the check?
Once investors understood the complexities of the franchise industry and how large this sector of the economy is, they were energized by the opportunity for innovation. My co-founder and I are both highly technical and have a proven track record of building AI products for enterprise customers, which instilled confidence in the investors that we were the right leaders to tackle this challenge. And finally, Jonny and I benefited from being best friends since middle school — we were in lock-step throughout the entire process.
Once investors understood the complexities of the franchise industry and how large this sector of the economy is, they were energized by the opportunity for innovation. My co-founder and I are both highly technical and have a proven track record of building AI products for enterprise customers, which instilled confidence in the investors that we were the right leaders to tackle this challenge. And finally, Jonny and I benefited from being best friends since middle school — we were in lock-step throughout the entire process.
What are the milestones you plan to achieve in the next six months?
With our pre-seed round closed, we are laser-focused on expanding the number of franchisors we work with and deploying an order of magnitude more AI agents that solve their problems.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Invest the resource you do have — your time — in customer discovery and striving for excellence. This costs nothing and will return dividends by shaping a valuable product and sharpening your pitch to investors.
Where do you see the company going in the near term?
Our focus is on working closely with more enterprise design partners and ambitiously developing new AI agents that solve their most pressing challenges. To support these goals, we will continue to grow our team with a focus on engineering and commercial roles.
What’s your favorite summer destination in and around the city?
Both Jonny and I grew up in South Brooklyn, so we love Coney Island! We highly recommend stopping by Tottono’s Pizzeria and Nathan’s when you’re in the neighborhood.
