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Technology Offers Franchising Unlimited Possibilities
by David Farmer

In the best selling motivational book Who Moved My Cheese?, Dr. Spencer Johnson tells an enlightening parable about what can happen if we can’t accept change and are unwilling to try new approaches to fulfill our needs.

Dr. Johnson spins a tale about two sets of mice living in a maze where cheese is set out each day. One day the cheese isn’t there. The first set of mice develops a plan to find cheese elsewhere. The second pair simply sits there, complaining loudly about the fact that someone moved their cheese.

Franchising can be like the story in Dr. Johnson’s book. The one constant in the franchising industry is change. Franchisors should always be looking for new and better ways to market their products, operate efficiently, coordinate the distribution of goods and communicate well with their franchisees.

Those who rest on their reputation and assume that things will never change can end up like the unfortunate rodents in Who Moved My Cheese?. But those who are never satisfied with the status quo and are always on the lookout for new technology that will keep them a pace ahead of the competition often are the real stars of the industry.

That is why individuals like you, who are thinking about investing in a franchise, should look beyond the comfort level of name identification and established reputation when weighing the pros and cons of one franchise over another.

Franchising is a multi-billion dollar industry today with more outlets for investment than anyone could have conceived a decade ago. With franchisors now engaged in every business from dog washing to dollar stores, this is a new industry that demands new technology. And, fortunately, high tech has done a good job of staying in step with the breakneck pace of franchising companies. That’s why technology has become a new key in selling franchises. Gone are the days when companies used electronics only to handle accounting and inventory. Marketing technology is the latest "must have" that franchisees should seek when making their franchising purchase.

Less than two years ago, it was harder to sell prospective franchise holders on the need for good technology systems. The idea of using these systems to build their business would sometimes scare people. They tended to gravitate toward known brands rather than the technology that companies could offer.

But times have changed. With businesses using the Internet so effectively to market products, franchisees now realize there is added value in having effective technology in all elements of franchising.


NIMBLE AND COMPETITIVE

All franchisors are using technology today. But some are doing so more effectively than others. Many of the small and medium-size franchising companies recognized the marketing benefits of technology more quickly than their larger counterparts. As a result, they are more nimble and have become even more competitive.

Some of the large franchises have attempted to build on the technological systems they already had in place and results have not always turned out well. They have created a kind of Frankenstein''s monster by adding parts here and there rather than installing a modern system. That is why it is important for you to ask questions and do independent research when you are deciding whether to invest in a franchise outlet. Franchising has changed dramatically due to the shifting marketplace and new investment opportunities. That has been well documented.

But not everyone realizes how dramatically franchising also has changed internally due to major technological innovations. The tools available today to compete in the marketplace have improved significantly because of the industry’s increased commitment to technology.

Marketing and technology no longer are separate entities. They are coming together in more ways than ever, and more ways than most franchisees ever considered. If you are in the market for a franchise, you have to know what is available today and what is probably coming tomorrow.

People enter franchising for a variety of reasons. Some do so because they hope to become wealthy, while others simply want the chance to be their own boss. When individuals take the plunge and invest in a franchise, they anticipate growth. But they don’t always think about what will be needed to ensure that growth and an appropriate return on their investment.


Franchisors should always be looking for new and better ways to market their products.

Franchisors have been using technology to market their products for years. But sophisticated systems are in place today that can handle the task in ways that give franchising companies and franchisees a significant advantage in the marketplace. Franchisors have access to systems that can create newspaper sales ads based on the exact number of overstocked products the franchise holder wants to sell. The system keeps track of the items and plugs the number into the copy that it prepares for the advertisement.

The franchisees can even direct the computerized system to create an ad that lists all of the store products that have less than 100 items in stock. That lets the franchise holder move his goods efficiently without having to stop to take inventory. This is particularly critical to the dollar stores that are so popular, but must deal with constantly shifting products.


DRAWING CUSTOMERS

What persuades a consumer to make a decision more quickly than an ad that specifies how many items are available at the discounted price?

Computer technology also can help major franchisors gear marketing to the needs of specific outlets. Even a huge chain such as McDonald’s can face a dilemma when some of its franchise stores receive deliveries that include too much lettuce, for instance.

The franchisor can now help solve the crisis with marketing systems that are capable of customizing ads to meet the needs of the franchisees. For example, a McDonald’s monthly promotional ad for those markets where the franchisees have an overstock of lettuce can include special pricing for salads.

This can be achieved by using an electronic template that can easily be revised for specific sections of the country. It makes sense today. But a few years ago, no one was thinking this way.

There are many other ways that franchisees are using computer technology to build their reputation for solid customer service. Some franchise holders have the capability today to complete a sale and deliver a receipt before the customer has even had to get in line. I know of one company that is able to deliver the product to the customer’s home before he gets there by simply processing the order electronically right there at the store.

I call this "value-added technology," and it could be the most important next step in franchising. You want a franchisor who will help you build business and revenue and drive people into the store. The right technology can help them achieve that.

The key is having systems in place that franchise holders can easily comprehend and adapt to their business. If the technology is set up for accounting, it should be designed so it can "talk" to other accounting systems throughout the franchise network. There should be uniformity to the system so the franchisee has a comfort level of understanding.


You have to know what is available today and what is probably coming tomorrow.

Technology also plays a vital role in training for the most successful franchising companies. Franchisors should never cut corners when it comes to proper training of staff members at its franchise outlets. A solid online training program helps ensure each franchisee that his workers are getting the instruction they need.

Franchising is the most exciting industry in America today. Billions of dollars are spent annually at franchise outlets. Investors have achieved their dreams by choosing to operate the right franchise at the right time and in the right place.

David Farmer is founder and Chief Executive Officer of Ad Giants, a Dallas-based technology company that provides process management systems for marketing and advertising.

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