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The application of the right technology has the power to catapult new franchises to new levels. On the other hand there are challenges that can prove to be frustrating if they are not address adequately or on time.
The challenges that need to be addressed by franchisors include:
• Extent of technology implementation that is needed at the start of the franchise.
• The order of implementation of technology.
• Use of technology and protecting the franchise from legal issues.
• Determine if the costs are worth the benefits they provide to the business.
Deciding When and Which Technology to Use
Decisions about the implementation of technology should be made at the start of the business. Failure to do this and franchisors run the risk of making far reaching changes that are costly and disruptive to the business.
Additionally, if franchisors fail to determine the technologies that will be implemented at the start of the business, there is the possibility of incompatibility that may force an overhaul of the entire system.
Boston Consulting Group did a study on the use of technology for franchises and gave a number of principles that should be observed.
1. Your target market has already embraced technology and they may naturally expect you to do the same.
2. Early adopters often have an advantage over the competition.
3. There is need for a clear policy on the application of digital solutions.
4. Technology addresses unique challenges and therefore there is no one size fits all.
Protecting the Brand and Legal Issues
The technological infrastructure can facilitate business processes and make businesses more efficient. However, it is important for franchisors to be aware of the legal implications that come with implementation of technology.
Franchisors face possible legal hurdles in the form of joint employer liability. The implementation of technology should be focused on developing quality systems rather than focusing on procedures such as hiring, firing, etc. Focusing on these procedures increases the risk of joint employer liability.
The potential liability that results from the implementation of technology was seen during the court case between McDonald’s and NLRB. McDonald’s was exposed to joint employer liability because of their computerized advice over employee work hours. The use of computerized advice created the impression of control, which in turn led to claims of liability.
No One Size Fits all
No one size fits all is true for technology as it is for all business process. The problem arises when the franchise focuses on the digital strategy rather than on the problem that it ought to address. There is the risk that a franchise could end up implementing a digital strategy just for the sake of it.
It is therefore important to start with the end in mind. The implementation of digital strategy involves the use of tactics, strategies, and tools to address the unique problems that the brand seeks to solve. The digital strategy should be developed from this perspective. Franchises can find the right balance by networking, and engaging technology suppliers.
Alan George
Vice President
Franchise Marketing Systems
