Why Tech Matters More Than Ever For Franchises

Most people manage their entire lives through their mobile devices. With applications that facilitate communication, track your physical activity, pay your bills, share photos and even start your car, technology has become a huge part of our daily lives. If we let our phones manage our personal lives, shouldn’t we let them manage our businesses, too?

Small and large businesses alike are reaping the benefits that technology offers. Intranets, customer-loyalty programs, single communication platforms, and point-of-sale systems reduce time and costs of business management, yet franchising – the business model that would potentially benefit the most from such technology – has been the slowest to adopt it.

Persuading the franchise community to adopt new practices is no easy feat. A lengthy vetting process and long-term contracts leaves vendors with out-of-date systems. Entrepreneur magazine recently quoted Edible Arrangements founder and tech geek, Tariq Farid, on the slow adoption of technology in franchising. “Saying that many franchise systems are stuck in the ‘90s is being kind,” he says. “I think franchising is an amazing model, but technology is not in the comfort zone of a lot of franchise leaders. They don’t understand that the point of technology is to make life easy so franchisees can focus on growing their business, not running their business.”

Franchise owners have varying levels of authority to make technological changes and sway from the corporate standard, but even those without a strict policy to abide by are typically hesitant to implement new technology.

Gen X & Gen Y: current consumers, future business owners

Implementing technology in franchises is unquestionably beneficial for the company, but it will also become unavoidable. Generation X, or Millennials, and Generation Z will soon dominate the workforce and also become the largest customer demographic. These plugged-in generations grew up in the emerging world of technology and demand the most efficient and effective forms of communication. They want to work for companies that have fully integrated technology into their business models, and as consumers, they want to return to businesses that implement technology to make the consumer experience efficient and enjoyable. These generations will not work for a company that does not employ the most current technology, and they will not return to businesses with inefficient consumer services.

Streamlining communication

Technology can significantly reduce operating costs and increase efficiency by providing a single platform for all franchise communication and processes. This solution eliminates manual processes and streamlines communication and operations. Single online communication and collaboration platforms, like an intranet, not only reduce meeting, printing, maintenance, support, and training costs, but they also facilitate communication and data integration between corporate and franchisees and between franchisees. Organizations can buy or build these platforms, and with all the subsequent benefits, they will reap a fast return on investment aided by the falling cost of technology.

Tailoring to the customer

Keeping up with trends in technology directly benefits companies by creating a more efficient and connected business, but it also benefits companies by pleasing the consumer. Businesses have successfully implemented and realized the benefits of technologies that please the hate-to-wait consumer and the tech savvy consumer. NoWait, a consumer-facing app, is a digital wait list and seating tool for casual dining restaurants. Serving over five million customers per month and utilized by franchises such as Buffalo Wild Wings and Chili’s, the app notifies customers when their table is ready so they don’t have to wait around or carry a pager. American global franchise Dunkin’ Donuts remains competitive among tech savvy consumers by maintaining a user friendly and comprehensive app that allows for customers to pay for their orders with their phone, receive exclusive offers, redeems rewards, and find nearby locations. Franchises serve consumers, so it makes sense that providing technology demanded and appreciated by consumers or technology that improves customer experience results in increased sales.

Bottom line: less time, fewer costs

The world’s largest chain of hamburger fast food restaurants, McDonald’s, has been losing market share to fast food competitors that have adopted technologies such as online ordering, digital payment systems, and touch-screen customer ordering. Cutting-edge technology is and will be what separates the successful businesses from the unsuccessful businesses. Companies with customer-facing apps, APIs, and cloud-based systems will reap huge rewards as they reduce operating costs, save time, reach more consumers, and connect franchises and franchisees.


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