Technology is influencing the competitive landscape for businesses of all kinds—and at FranNet DFW we are definitely seeing an impact on how franchises operate. Part of the reason is a generational shift. There’s been a 93% increase in business ownership among those aged 20-39 in recent years. These Gen X and Millennial entrepreneurs weren’t raised to assume they would have a corporate job and work there until retirement. They want to take control of their future, and franchises seeking to attract these young business owners need to keep up with technology to do that.
But there are many other practical reasons that franchises are seeking technology solutions. For example, they want to:
- Drive down operating costs by streamlining processes and integrating data and systems within individual franchises and across the organization
- Use business intelligence (BI) dashboards to analyze the performance of franchisees and make informed decisions for the future with more accurate forecasting
- Improve customer experience with the brand through CRM and related systems
- Effectively use social media and leverage customer-generated content for marketing
- Have better documentation of communications for legal and compliance purposes
- Automate payment systems on the customer side and for managing royalty payments to the franchisor
Software Enables the Formation of New Franchises
The ecosystem of vendors providing support in this area is flourishing. I asked Chad King from Ayoka Systems (a custom software development company in Arlington, TX) to describe how business owners are using tech to help create new franchises. According to Chad, “Business owners seeking to franchise their business model recognize technology plays a key role in establishing uniform business practices, monitoring performance relative to corporate standards, and striking a balance between operator independence and governance of the corporate brand. Franchisors instill their practices, i.e. operator manuals on how to run and grow the business, into an integrated software system that is leased back to their franchisees. These systems connect the full lifecycle of business activities, from sales and order entry, to back-office operations, such as inventory and scheduling staff. The individual franchisee can simply subscribe to the software (Software-as-a-Service) and focus on the work that will expand their business.”
Tech Makes Day to Day Franchise Operations Simpler
Even non-tech companies serving the franchise sector are starting to use more advanced technology to keep up with the needs of multi-location businesses. They are replacing older processes with easy online services. The printing industry is one example. As my friend Tim Knote at PrintPointe in Fort Worth told me, “We invested in an online ordering portal software and it has been a blessing for our customers and our office as well. Our custom-built ordering portals allow our customers to place multiple orders for multiple locations quickly and efficiently. Being able to select and edit their products online and getting an instant proof saves 3-4 steps from traditional ordering procedures.” With a virtual print shop at their fingertips, there’s no need for franchisees to wait for distribution of printed materials from the central headquarters. Each franchisee has access to order materials for their own locations, ensuring they get exactly what they need when they need it.
What about Improving the Bottom Line for Existing Franchises?
Chad revealed that service-oriented businesses like water damage restoration, HVAC, and plumbing are seizing the opportunity to use technology to track performance. “Effective software automates the ability to track Key Performance Indicators (KPI’s) at the corporate level and drill down to the franchisee, trade and technicians in the field. Connecting all franchisees to the same system enables reporting to track the number of services performed, technician recommended services that were presented and sold, and number of service agreements by the technician. Franchises also monitor personnel capacity and utilization in real time, average service revenue by ticket, gross margin by work order, and billable performance by hours worked.” He described how one cleaning services franchisor implemented a digital system to track and reach out to customers who declined services. Being able to automatically send out notifications, reminders, and drip email campaigns added significant revenue by capturing customers who previously slipped through the cracks.
Technology Matters in Selecting a Franchise
As you probably know, FranNet DFW does NOT represent every franchisor out there. We carefully vet franchises before presenting them to our clients, and technology is a strong factor in determining which business models make the cut. We are excited to offer our clients access to franchises that set them up to succeed with modern technology that makes it easier than ever to run a business. To learn more about these opportunities, contact us for a consultation today.