By Carl Udler, CFE, Hughes

Technology is essential to scaling a franchise, but there’s more to growth than selecting the right software.

Profitable and sustainable growth is built on a comprehensive strategy centered on maximizing investment value, optimizing operations, and attracting high-performing franchisees. Managed service providers (MSPs) sit in that strategic layer, enabling scale by helping franchisors solve the operational aspects that make technology work across a growing organization.

Want to scale? You need consistency and control.

When brands have a handful of locations, it isn’t an issue if different franchisees have their own ways of doing things. Franchisors can often focus on larger issues of growth and leave operational decisions, such as how to connect to cloud-based systems and what kind of cybersecurity tools to use, to franchisees. This flexibility makes small portfolios more agile and helps encourage system growth by reducing barriers to entry.

That changes once a brand crosses a threshold, usually 50 or 100 units, when the needs of both franchisor and franchisees begin to shift. Expectations, capabilities, and risks change. Internet connectivity suddenly matters more, because it must be reliable and robust enough to support data flows between multiple advanced systems. Cybersecurity becomes a higher priority as the network endpoints multiply. Operational consistency gains prominence as customers and employees expect to see your brand’s values reflected in every touchpoint.

The complexities of growth stress smaller franchises’ ad hoc systems.

Troubleshooting and technical support are a nightmare when hundreds of locations each have unique technology stacks and connections. Internal teams that easily handled a handful of franchisees now feel the weight of dozens or more seeking help with Wi-Fi equipment, system logins, internet services, POS terminals, and digital signage updates. A fractional CIO without a full internal group, and even a full-time CIO with limited staff, will likely be unable to act on requests and issues effectively. An MSP is the essential partner you need to understand and manage this risk as your brand grows.

Protection as a Strategic Priority

Cybersecurity is another area where scale creates additional risk for brands. A sprawling franchise network is an attractive target for criminals, with potential vulnerabilities lurking in each location. But data breaches and other incidents don’t reflect on franchisees the same way they do on franchisors. It’s the brand’s name that’s splashed across headlines and used in offers of credit monitoring to affected customers. Without direct financial motivation, few franchisees will invest in cybersecurity independently.

Working with an MSP enables franchisors to elevate cybersecurity to the brand level. You can establish mandates to ensure cybersecurity tools, processes, and training are robust enough to protect your network and your reputation. This strategy empowers franchisees to understand their role in protecting the business and gives them incentives to maintain good security practices.

Innovation as a Growth Tool

Scaling strategically means more than adding locations. It also means empowering franchisees with technologies to help make them more efficient, more resilient, and more profitable. For example, AI can be used to save employees time and to deliver a better customer experience, too. But rolling out new technologies across hundreds or thousands of locations is labor intensive. Working with franchisees to implement, train, and support new platforms isn’t something many brands want to tackle with internal staff. An MSP experienced in franchising can provide experts to manage new rollouts efficiently. They have the tools to predict potential problems, monitor existing systems, proactively avoid failures, automatically deploy fixes, and ensure new implementations are secure and performant.

Operations Built for the Future

If you think about your billing process today, can it handle exponential growth without becoming a maze of individual invoices and never-ending reconciliations? Running technology and its operational elements through an MSP empowers you to set baseline requirements and ensure they’re met while streamlining billing and cash flow. Rather than juggling hundreds of invoices for the same thing, a direct relationship with an MSP makes billing franchisees a breeze. All locations are billed on the same invoice, rather than receiving an invoice for each location from a different provider. And when technology requirements are imposed from the brand level down, there’s no question about whether or when franchisees have a proper connection that is up to date.

In a highly competitive world, working with an experienced MSP also makes your brand more attractive to franchisees. Multi-unit, multi-branded franchisees are important partners who understand the value of a strong technology strategy. Today’s robust, mature brands use technology to sell more of their products or services, and to sell them more efficiently and for a lower price. Experienced franchisees know that their success relies on a highly capable technology infrastructure. Strategic alignment of technology and business objectives can be a key selling point for potential franchisees and the foundation of successfully scaling your brand.

Some MSPs are particularly active in the franchise sector, and they prioritize minimizing technical debt and maintaining flexibility to adopt and leverage new tools efficiently and effectively as brands mature. This select group of providers understands the challenges, trends, and opportunities that sit in that strategic layer of franchise growth. They speak at conferences, offering thought leadership based on the experiences gleaned through their extensive customer bases. Franchise-focused MSPs are trusted advisors with the expertise, tools, and support structure to help your brand grow successfully.

Carl Udler, CFE, is senior director at Hughes. For more information about IFA supplier member Hughes, please visit franchise.org/suppliers/hughes/.