By Sasha-Lee de Bod with credit to Sunday Times Franchising Technology is forever changing and franchises that want to survive need to keep up with the trends and continuously innovate their business model. Anita du Toit, partner and consultant at Franchising Plus, recently stated in an interview that: “Technology can be a very useful tool to manage a franchise network and manage performance.”Having access to franchise and business tools online makes processes much more convenient for both the franchisor and franchisee. du Toit highlights the fact that it is not about policing franchisees; all these systems, tools and processes add value to all the parties involved.
Investing in Cloud technology will ensure considerable advantages to the franchise business, e.g.
- increasing capacity and infrastructure,
- standardised operations and procedures,
- enhanced collaboration and
- increased efficiency and effectiveness.
Cloud computing enables a franchisor to have a centralised information database that can be accessed through various internet enabled devices. Franchises can use the cloud to improve internal communication throughout the franchise network and enhance storage backup and management solutions. The implementation of online franchise operation manuals and communication platforms is becoming more prevalent in the franchise industry. du Toit states that “In the old days if you bought a franchise they gave you a great big operations file for running the business, trained you on it, then promptly stuck it in a drawer somewhere. These days it is moving all online. Your operations manual should now navigate like a website, where franchisees can download templates when they need them. One advantage of this is that it’s much easier to implement updates to the system. An associated communications platform that franchisees have to log in every day can also be used to alert them to new products and industry news.” Franchising Plus offers such a franchise management platform, called Herding Cats, which enables communication, sharing of operational information and management data. Read more about this system here Point of Sale (POS) systems are also being integrated through the cloud for outlet peripherals, payment solution services and backend data management solutions. Digital Management Systems will ultimately replace the traditional POS system. As trading becomes more complex, franchise management systems need integrated platforms that incorporate point of sale, customer relationship management, inventory, etc. du Toit encourages benchmarking initiatives in all franchise networks. “Franchisees can participate in financial benchmarking, which can tell them how far they are from the ideal operation, and help them towards better cost effectiveness and profitability”
Online webinars video conferencing
There have been vast developments in online training platforms. These online platforms can also host webinars and video conferencing, facilitating easier training and communication across a franchise network. du Toit argues that “It becomes prohibitively costly to visit each outlet or to get franchisees to a central location to deliver training.”
Franchisors can implement convenient payment technologies and applications in their franchise network for franchisees, which enables mobile phone payment solutions
Blockchain technology has started to gain momentum across a variety of industries in the past year. This provides franchisors with opportunities to build new efficiencies into franchise models and reach the market in compelling new ways. Blockchain offers transparent and open access to a distributed chain of data that are listed sequentially in block. Thus, preventing data tampering and increasing trustworthiness. This platform is not only limited to information, it can exchange and store anything of value securely. There are programmes available that can assist franchisors with their management service fee systems by streamlining fee collection and increasing accountability – this eliminates the need for intermediary parties.
Social Media Platform management
Franchisors need to carefully consider how to manage various social media platform processes. Anita du Toit states that “it is very important for franchisors to have a social media policy and provide training for franchisees on how to use it. A lot of franchisees in South Africa are in the over 40 age bracket and are less comfortable with social media, so training is very important” A proposed suggestion from du Toit is having a centralised office where franchisees can submit content for viewing, approval and ultimately distribution across appropriate channels. This will ensure relevant content from a source in touch with their immediate environment and audience that conforms to prescribed standards. However, digital marketing is becoming a useful and cost-effective tool for franchisees to advertise their businesses. For example, Facebook marketing is a cost-effective way to reach customers in a franchisee’s immediate area, but they need to have their own Facebook page to run this. Franchisors should provide training and stringent guidelines on content to enable franchisees to use this tool effectively while maintaining brand standards and reputation.
E-commerce initiatives are on the rise and growing at a fast pace. Franchisors may wish to operate a centralised e-commerce platform for the entire network or operate it as a head office initiative. “We advise that franchisors be very careful when drafting strategies for online sales” says du Toit. If a franchisor fulfils online orders for goods or services that originally might have formed part of a franchisee’s area conflict of interest might arise. du Toit states that “You need to involve the franchisees: if a client orders online, they could get a commission or delivery fee, so they’re not totally excluded from the transaction”
The evolution of big data has made the data gathering process more attainable irrespective of the infrastructure/network size. It gives a franchisor the advanced capability to gather data and interpret information about their franchisees and their customers to make detailed predictions and informed franchisor decisions. Franchisors can implement online franchisee satisfaction surveys on a regular basis to monitor satisfaction and commitment levels of franchisees. du Toit stresses that: “it is very important to continuously measure franchisee satisfaction to ensure the success of the franchise network by improving relationships with franchisees”
It is impossible to predict the impact of all the technological trends on a franchise network, but it is important for franchisors to be aware of all the developments to ensure a proactive and flexible response to stay ahead of the curve.