Growing a Franchise
Technology decisions made in the early stages of a franchise can create problems later. Here are six areas franchisors should address as they build a system designed to grow.
For an emerging franchise brand, technology may not be at the top of the priority list. Leadership is usually focused on selling franchises, opening locations and helping new franchisees get their businesses running. But the technology decisions made during those early stages can have a big impact as the system gets larger.
“Technology tends to be almost an afterthought in the initial stages,” Bryan Aten, executive vice president of sales at WT Solutions, told GoodSpark Franchise Growth Accelerator CEO Charles Internicola on a recent podcast. “It’s not necessarily that they didn’t pick the right point-of-sale system, kiosks or whatever else they were deploying, but they weren’t enabling the franchisee community with the right tools to get started.”
The problem often isn’t the technology itself. It’s that the franchisor hasn’t created clear standards for how technology should be installed, managed, protected and supported across every location. Here are six areas franchisors should think about before growth makes those issues harder to fix.
If the franchisor does not set clear technology standards early, franchisees may end up using different vendors, equipment and systems. As the brand grows, that patchwork can become much harder to manage and support.
Franchisors can avoid much of that confusion by deciding early what franchisees should use and how it should be set up. That includes everything from internet connectivity and networks to point-of-sale systems, cameras and other technology used inside the location. Consistency also makes the system easier to support.
“Standardization becomes a pretty big piece of that,” Aten said. “You can’t manage lots of different configurations in a single operator model. You want to standardize it so they can keep their compliance in the same framework.”
Technology shouldn’t be something a franchisee figures out shortly before opening. For a brick-and-mortar concept, the network, connectivity and other systems are part of the location itself and should be planned alongside the rest of the build-out.
“We’re bringing the plumbing into the facility, the connectivity, the network,” Aten said. “We’re helping stabilize that. We’re helping make it the right size for whatever they’re trying to accomplish.”
That becomes especially important as brands add more technology to their locations. Cameras, cloud-based programs, point-of-sale systems and other tools all depend on having the right infrastructure underneath them. If the basic network isn’t built to handle those needs, the brand may have to go back and fix problems later.
Deployment can also become a challenge when a brand begins opening locations quickly. Aten said fast-growing franchise systems sometimes need more than one technology partner because a single provider can’t keep up with the opening schedule.
“We’ve seen some brands that are growing pretty rapidly, and typically they’re looking for a different or a secondary option,” he said. “They just can’t get their stores built in a timely fashion.”
Technology can block many cyber threats, but it can’t prevent every employee or franchisee from clicking a bad link or responding to a convincing fake email. That makes training an important part of a franchise brand’s security plan.
“Those are human errors,” Aten said. “We run programs to help educate the user who’s leveraging these systems. You use tools out there to run simulated phishing examples, for example. You use simulated phishing tools to help educate them on what to look for.”
Training doesn’t need to be complicated. Aten said brands can provide short educational sessions on a regular schedule and use simulated attacks to see whether employees recognize suspicious messages. Technology can then provide another layer of protection by identifying and blocking potentially harmful activity.
“You’re deploying the tools in the background to help mitigate that, to look for certain signals and signatures that help block that malicious behavior from coming through,” Aten said. “Systems are going to catch a good chunk of it, but the people have to also know what to look for.”
Franchise brands also need to think about how their technology connects franchisees to one another. Email is a good example. A franchisor may provide email accounts across the network, but the way those accounts are organized can affect what happens if one franchisee has a security problem.
“We’ve seen large franchisors provide email accounts for their franchisees, which is pretty common,” Aten said. “The problem is that many of those accounts are commingled on the same platform without barriers between individual franchisees. That can create security concerns if an issue affecting one franchisee has the potential to spread to others.”
Creating separation between franchisees can limit how far a problem spreads. The same thinking can apply to other technology that connects locations or gives people access to company information.
“If you implement the right type of technologies, you can subset them apart from one another,” Aten said. “So if there is an issue in one franchisee location, it has less of a probability to propagate to others.”
Technology needs can change significantly when a franchisee goes from owning one location to operating dozens or even hundreds. Larger operators may need different access levels for employees, managers and executives, along with better reporting across their locations.
“When you have franchisees operating hundreds of locations, that’s when you start to see more complex technology requirements,” Aten said. “They’ll often establish a hierarchy within their organization, with frontline employees having one level of access, regional managers having another and the executive team having a different level.”
Those needs can expose weaknesses in technology that worked well when the system was smaller. Franchisors should think about whether their systems can handle larger operators before those franchisees reach that point.
Artificial intelligence and cloud-based technology are creating new possibilities inside franchise locations, particularly with camera systems. But brands should start with the problem they want to solve rather than adding technology simply because it is available.
“We’re seeing more brands move from in-store monitoring to cloud-based systems,” Aten said. “They’re using those systems to better understand customer traffic, identify backups at checkout and determine where additional staffing may be needed.”
For retailers, the same technology can be used for loss prevention. Cameras can help identify unusual activity or potentially flag when merchandise leaves a store without being purchased. Other businesses may use the technology to better understand traffic patterns or staffing needs.
A technology setup that works for five franchise locations may not work for 50 or 500. The earlier franchisors establish standards for deployment, security, support and access, the easier it can be to maintain consistency as more franchisees enter the system.
Technology doesn’t need to become the franchisor’s main focus. The goal should be to create a technology structure that works consistently enough that the franchisor and franchisees can focus on running and growing the business.
Watch the podcast above or on YouTube.
For more information on GoodSpark and its services for developing franchises, visit https://www.goodsparkfranchise.com/.
Sign up for the 1851 Franchise newsletter to get our biggest stories before everyone else
By signing up, you agree to our user agreement (including class action waiver and arbitration provisions), and acknowledge our privacy policy.
