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Leveraging Technology for Franchise Performance and Growth
August 2008 Franchising World
Effectively-implemented franchise technology solutions can provide a single platform to manage franchise processes by significantly reducing operating costs. By Amit Pamecha A quick look for the fastest-growing and best-performing franchise systems shows that there are several factors attributable to their success: • The unique idea or concept behind the franchise, While there is little that can be done to fundamentally alter the basic concept behind a franchise, all other factors can be greatly enhanced by effectively leveraging technology and systems. • Automation of royalty-reporting collection processes by eliminating paper or e-mail reports, automated royalty computation and by leveraging electronic funds transfer. The result is elimination of manual processing by the accounting department, on-time royalty payments and improved cash flow. • Implementing business intelligence/ performance dashboards that can help provide feedback on sales flow of services or products; monthly or yearly changes in product mixes; track affect of promotions and marketing on sales; analyze individual franchisee performance; compare profitability across the entire franchise system and help quantify the reasons for poorly-performing franchisees by providing income and expense analysis. • Creating an online platform for communication and collaboration, such as an intranet, can significantly reduce communication costs, eliminate printing costs and the costs of physically meeting every few months. It also fosters sharing of ideas between franchisees, leading to improved franchisee relationships. • Building a legal database that can track legal and compliance information and the entire communication history with franchisees can help reduce the costs associated with lawsuits and franchisee support. These applications can also reduce the effort involved in managing paper folders on each franchisee and the ability to run reports across franchise locations. • CRM and marketing applications can reduce the costs associated with direct mail and e-mail campaigns while helping to build loyalty among end-customers. • Eliminating multiple technology platforms across departments can reduce the costs involved with maintenance, technical support, programming changes and user training associated with different applications while providing data integration across the entire organization. Franchisee performance and profitability can be significantly improved by leveraging the following best practices:
Getting More Done with Less
Amit Pamecha is the CEO and co-founder of FranConnect. He can be reached at amit@franconnect.com or 703-390-9302.
• Franchisor and franchisee profitability,
• Ability to sell new franchises,
• Franchisee relationships, and
• Getting more done with less.
Improving Franchisor and Franchisee Profitability
Technology solutions can help significantly in reducing operating costs while increasing franchisee top lines, thus improving profitability for most franchise systems. Hundreds of franchise organizations have already benefited from implementing solutions that have helped eliminate manual processes and streamline operations. Some of the quick fixes include:
Providing franchisees with dash-boards can help them to analyze their performance and allows them to compare their performance against all other franchisees or franchisees within the same region or in a similar market. Franchisees are always motivated by the performance of other franchisees (part of the reason why most of them bought the franchise in the first place, irrespective of whether the organization makes earnings claims or not). Providing them with tools that help them learn from other performance leaders can create a dramatic impact.
Most franchisees get so involved with their daily operations that marketing and customer management often takes a backseat resulting in loss of revenues. Easy-to-use customer relationship management applications and tools for print and e-mail campaign management can allow franchisees to run their marketing efforts on auto-pilot while providing the franchisor with visibility into the franchisees sales and marketing efforts.
Achieving Superior Franchise Growth
Technology and the Internet can play a significant role in taking franchise development efforts to the next level. The Internet continues to be the major direct source of franchise leads for most organizations. However, most franchisors are also witnessing a dramatic dip in both the quantity and quality of leads that they are getting. As a result, it is critical to have a well-defined attack plan for managing Internet leads and the franchise development process.
Leveraging search engine optimization techniques and managing a Google or Yahoo! keyword strategy effectively can be a powerful source of critical leads that are actively looking for an investment or owner-operated franchise opportunity.
Most experts recommend making an immediate contact with Internet leads through automated e-mails or phone follow-up to have the best chance of reaching prospects that may be simultaneously contacting multiple franchisors. A lead-management system integrated with e-mail or call-center campaigns can ensure that leads are directly put into the system and contacted within 30 minutes of them first contacting the franchisor.
Given the fact that buying a franchise is often an emotional, lifestyle and a significant investment decision for most franchisees, closing the deal requires constant relationship building. Setting up “drip e-mail marketing” campaigns that allow prospects to continuously receive snippets of information from the franchisors, including testimonials from other franchisees, can help prospects warm up and become emotionally-involved with the franchise.
Technology can also help in eliminating manual processes related to the sales process such as entering manually all incoming leads into a database, sending out paper packets and applications forms instead of online electronic forms, sending out franchise disclosure document packages and more.
Given the limited resources at the top for most franchise systems, controlling operating costs is paramount to their success. However, without proper technology and systems, running a successful franchise organization requires more and more people as the system expands.
Effectively-implemented franchise technology solutions can provide a single platform to manage franchise processes by significantly reducing operating costs. And with the continuously falling costs of technology, whether an organization buys or builds these solutions, the return on investment is likely to be in months rather than years.
