Franchise brands with strong tech systems are well positioned to help their franchisees achieve business success
POST WRITTEN BY
Don Daszkowski Published in Forbes Dec 30, 2019
When you look at the franchise business today, it’s hard to remember that the classic franchise chains got their starts ringing up sales on manual cash registers, including early leader McDonald’s. They also counted inventory by hand. Franchise owners relied on their guts or guesswork to figure out what customers would want next and how much of it to order. It was also standard practice to fly franchisees to headquarters for training.
Today, franchising moves at the speed of technology. Tech is baked into nearly every part of franchise operations, helping unit owners track trends, train workers, learn, market to customers and make more sales. Franchising use of technology will continue to advance in the coming year, as the space grows ever more sophisticated and competitive.
What’s going on behind the scenes in franchising? Here are the top technology trends that will give tech-savvy franchise brands an edge in the coming year.
1. Artificial intelligence creates efficiency.
Software now tracks inventory levels for franchisees — often, from mobile Bluetooth devices — and automatically files reorders for franchise owners. Machine learning gives franchise owners real-time intel on customer spending patterns and uses predictive analytics to automatically forecast the most likely next purchase consumers will make.
2. Digital payments speed sales.
Already, terminals let dining patrons pay for meals table side at many national full-service dining chains, leading to faster turnover and higher profits. Wireless terminals from Stripe or Square ring up sales at outdoor cafes and events. Next up, look for more franchise chains accepting digital wallet payments, such as Apple Pay and Google Wallet (McDonald’s was an early adopter). The days when a quick phone-reader swipe pays for our purchase at our favorite franchise store are upon us.
3. Delivery apps and voice orders grow markets.
Especially in the popular food-franchising sector, the rise of Uber Eats, DoorDash and their competitors have created opportunities to easily make additional sales without the burden of having to lease and pay for a bigger space. Even better, franchise brands are hooking up to Alexa and other voice-activated virtual-assistant devices. There will be more opportunities for customers to order goods simply by speaking to their devices, which will signal their local franchise operators to send the items.
4. Gamification makes training fun.
Franchise employee training is rapidly going digital, and it’s getting more fun, too. App-based gamified training keeps workers engaged, with opportunities to compete in contests, win trophies, level up and rank on a leaderboard to win props from coworkers. In the franchise industry, where many chains see almost 100% turnover in a year, successful onboarding is essential to making sure customers have a positive experience. Gamification that makes training engaging and effective may seem frivolous, but it’s a dead-serious tool for consistently producing well-trained workers.
5. Automated SMS marketing builds revenue.
Sending customers a personalized text message about an upcoming sale or new-product arrival is more immediate and cost-effective than putting flyers on cars or mailing out coupons en masse. There are services automating the text-messaging process and making this a snap. Increasingly, SMS automation will tell franchise patrons their table is ready, ask customer-survey questions, run flash sales when an owner needs quick cash, welcome new customers and promote upcoming events. In an age where our email inboxes are overflowing, SMS marketing is fast becoming franchisees’ best friend.
6. Loyalty programs grow up.
AI is smartening up loyalty programs by using purchasing information to customize rewards to individuals’ preferences. One loyalty program doesn’t have to fit all anymore, as machine learning enables franchise owners to segment customers and create different rewards for different customer types.
Franchise Business Plus Technology Equals Profits
What’s the catch to all this fabulous technology progress? All these solutions cost money, of course. But that’s where franchise chains have an edge; with the power of their national organization, franchises are better able to invest in AI and other tools that give all operators a leg up on local competitors.
Franchisors will need to carefully weigh the most cost-effective solutions for their brand. But there’s no going back to the days of doing business on gut instinct and a handshake. Top franchise chains will increasingly deploy technology as a competitive weapon to build customer loyalty and add sales.
If consumers sometimes think of franchises as cookie-cutter businesses that are out of touch with local needs, technology will change their minds. Tech provides detailed local intelligence and enables stronger customer relationships through more personalized interactions, and smart franchise brands will jump on that opportunity.