Printer-friendly version
Protecting Your Technology Investment
The time and money invested in franchise technology can have a lasting effect on the success and future of a franchise. Planning ahead is very important because, if done properly, technology can easily pay for itself many times over. Technology is one of the harder aspects of franchising that most franchisors will eventually have to come to terms with. While some embrace new technology and try to implement it wherever possible, some avoid it like the plague. Depending on the franchise concept, technology can make or break your future. Franchisors need to ultimately decide which technology can help or hurt their operations, but it is always good to ask professionals. Understanding how technology can help improve a franchise is critical to stay competitive and, most importantly, make money. Not only can technology help make the system more money by increasing sales, it can also save money by streamlining the method in which sales are processed. The right technology in the right place can easily translate into millions of dollars saved and or gained. The first part of any technology investment is deciding how it can actually help the franchise. Having the latest and greatest in technology doesn’t always translate into actual dollars saved or revenue gained. In fact, it can easily turn into the endless money pit that can drain funds desperately needed elsewhere. Even if a firm has been in franchising for many years, it needs to get professional opinions from other franchisors and experts on how to properly implement and protect its technology investment.
Hire franchise consultants first Many of the franchising consulting agencies available for hire to sell franchises for a client also have an excellent grasp on technology. Most importantly, they can let franchisors know whether they think that their technology plan will help sell more franchises or potentially scare prospects away with the cost and complexity associated with it.
Use the IFA Information Technology Committee Participants who attended the IFA’s annual conference should make sure that they attend the Technology Summit hosted by the ITC every year. This is the one occasion where attendees will find numerous leaders in franchise technology in one place, ready to provide advice for free. The round table sessions that follow the summit are also an incredible source of information. Not only are they one-on-one sessions with the professionals, but participants will also hear the first-hand experiences of other franchisors attending the sessions.
Use IT franchisors to implement Many IT franchisors are set up to service national franchise accounts and there is good reason why you should use them: accountability. When franchisees work with a local independent IT company, there is typically no recourse for that franchisee if the local IT person does something wrong or unethical. When a company works with an IT franchise, it can usually get in touch with the franchise system to help make things right with one of their franchisees. IT franchises are also in a much better position to help franchisees implement any nationwide technology plan because they will help standardize the process. Instead of using your headquarters staff to implement the technology plan one by one, consult with an IT franchise. They will communicate your plan to each of their local IT franchisees on how the system want things implemented at each of their locations. This way, the brand is in a better position to dictate the IT standard for each of its franchisees. Standardization in the technology plan is very important. Simple things like antivirus protection, firewalls, data backups and security processes are all decisions that should be made at a franchisor level, not by an independent local IT company a franchisee hired. The franchisor needs to set the standard nationwide and IT franchisors can then help the company enforce these standards on a local level.
Protecting your franchise technology 1. Anti virus protection, For example, leaving data backup decisions up to franchisees is an unwise practice. A franchise cannot afford to let franchisees lose their data needlessly. Leaving this critical IT decision up to franchisees should not be an option. Make sure they are automatically backing up data offsite with a reliable online backup company that knows the franchising sector thoroughly. Online backup solutions are available for less than one dollar a day and are by far the best business insurance policy that a franchise system can buy.
Use an extranet to communicate to franchisees Communication with franchisees is the most important element when implementing any technology plan. If the franchise currently does not have an extranet that franchisees actively use, invest in one now. Dollar for dollar, it is the best money the franchise will spend. In fact, it should be the very first technology investment the franchise should implement. Without one, it will be very hard to implement any franchise-wide project. While even the most simple technology items such as e-mail and point-of-sale systems might seem simple to implement on the headquarters level, it does not mean anything unless the franchisee understands and uses it. The only way the franchisor is going to get franchisees to understand any technology process is to communicate with them. Unfortunately, the firm cannot afford to physically talk to each of its franchisees every time there is an important announcement to make. Using an extranet is definitely the most cost effective way to do it. But do not hire just any Web development company to do this critical task. Hire a company that has many years experience in the franchising sector. Having an extranet is one thing, having one that franchisees actually use it is quite another. If franchisees are presented with a complicated extranet with all the bells and whistles, then chances are it will not be used on a daily basis by “non-techie” franchisees. Most franchisors know there is a lot of psychology involved in getting franchisees to use any system they recommend. Some suppliers have this process down to a science after many, many years of franchising experience.
Poll franchisees for feedback Many experienced consultants can provide an accurate litmus test as to whether the majority of franchisees love or hate the company. Getting structured input as to what franchisees are thinking can help fine tune any franchise implementation plan, especially complicated technology ones.
Protect the IT investment legally It is said that the one with the best lawyer typically wins in court. Hire the best. While it might seem like a significant investment for the franchise now, consider it just that: an investment that will help protect the franchise from anything the legal system can throw at it. If a franchise is not careful, there are always competing companies that will analyze your entire franchise concept to the letter and attempt to replicate it.
Publicize your technology While a franchise might be able to get the local newspaper to print the story, to get real nationwide coverage, sometimes the only way to effectively do this is to use a high-end PR company that already has the contacts with the reporters the franchise needs to talk to.
Plan ahead Dan Dugal is CEO of Remote Data Backups, Inc. He can be reached at dandugal@databackups.com and 866-722-2587. To discuss this topic further, visit the International Franchise Association’s Technology Forum at www.franchise.org/techforum.
By Dan Dugal
If a franchise is planning a large information technology project, it should consider hiring professional franchise consultants to provide feedback on their experiences with IT projects in other franchises. Franchising is their business and over the years they have probably seen it all. This is always a good starting point because a franchise can easily plan ahead before things get really technical and expensive. Remember, the end technology goal has to make good business sense. What might sound like a good idea may in actuality be much harder and more expensive to implement than previously thought.
The International Franchise Association’s Information Technology Committee is a great place to find professional franchise technology advice at no cost. The ITC has one primary goal: to assist franchisors in understanding how technology can help the franchise grow. Since the ITC consists of both franchisors and suppliers, those interested can get an unbiased opinion on their technology idea.
Once a basic technology plan is in place, one will need to decide how to implement it; either implement it in-house or outsource it. If the choice is to outsource the technology, seriously consider using an IT franchise to help implement it. It is much easier to coordinate with a few nationwide IT franchisors than it is to find hundreds of independent IT companies for each franchisee location.
If franchisees do not at least have a basic level of IT protection, then the technology investment is doomed to fail. IT franchises can help ensure that all of a system’s franchisees have the IT basics and that they are current. The following are the four most important tasks that a franchise needs to cover:
2. Firewalls,
3. Automatic updates,
4. Automatic offsite data backups.
One of the most important things to do for the franchise is to have an active extranet. An extranet is just like a typical Web site, but only the franchisor and franchisees have access to it. It is completely secure and it allows both groups to communicate with each other anywhere in the world.
A successful technology plan will only work with the help and participation of franchisees. To find out what franchisees are thinking and to get good feedback, ask them. But sometimes using headquarters staff is not the best choice to ask franchisees to get a truly honest answer or opinion about a technology implementation project. Seriously consider outsourcing this task.
If a firm has successfully implemented a technology plan that is unique, it should seriously think about talking to a franchise attorney before making it public to see if it can be trademarked or even patented. The last thing to have happen is to have someone steal the idea (or even the name) and market it as their own. Even worse, they could pretend to be the franchisor. Protect the brand.
If the company has successfully implemented a technology plan that sets it apart from the competition, then by all means, brag about it. Use the successful technology plan to sell more franchises, which is the end goal of any franchise.
Implementing any technology plan can be challenging and will more than likely cost a lot of money. But if done right, it can be the best money ever spent. Don’t go it alone, get professional help. There is no one company that has all the answers. Get as much preliminary help as possible because changing course midstream on any technology implementation plan could have devastating cost consequences, not only dollar wise, but also with franchisee relations. Plan ahead.
