Building a Better Franchise

How technology has changed the way franchising is done

In 1981, when Jonda White, 50, bought a Deck the Walls art and framing franchise in Austin, Texas, orders were filled out on paper and mattes were measured and cut by hand. Now they have five computers: three for framing orders, one set up as a virtual gallery for customers to browse and one attached to an automated matte cutter. They even have a store Web site with online coupons. Part owner with her parents, White says, "It's very impressive to a customer when they come in and see you are up on technology."

Without a doubt, technology has changed the way franchising is done. Franchisors that have been offering their businesses for many years aren't just blasting willy-nilly down the technology highway; they're driving carefully. David McKinnon, chair and CEO of Service Brands International (Molly Maid, Mr. Handyman and others), embodies many franchisors' approach when he says, "We like to be leading edge but not bleeding edge. We want to make sure a given tech has a proven benefit for us before we jump into it." That's good news for franchisees who gain the benefits of the parent company's testing and return on investment studies before a new technology is rolled out.

It's in the area of communications, between franchisors and franchisees, between franchisees and other franchisees and between franchisees and their customers, that some of the greatest progress has been made with the aid of technology. Just within the past few years, Intranets and Extranets have become popular. Deli franchise Schlotzsky's has been taking full advantage of their FranWeb system, a massive Web site with operator's manuals, calendars, articles, marketing information, news updates and discussion boards frequented by their franchisees.

Don Stitt, owner and operator of four Schlotzsky's restaurants in Amarillo, Texas, along with his wife, Tina Stitt, uses FranWeb nearly every day. He's in the midst of upgrading his stores with new computerized point of sales (POS) systems. "They're pricey, but they give you a lot more than just the ability to ring up a sale," he says. That "lot more" includes faster customer service and significantly less paperwork. POS systems are helping franchisees everywhere keep closer track of sales, trends and inventory and improve the customer experience.

The customer is still the bottom line. "We don't want to innovate technology for the sake of technology itself," says Mike Bidwell, COO of the Dwyer Group, franchisor of brands including Mr. Rooter and Glass Doctor. "At the end of the day, does it make the customers' experience better, and does it make the business more efficient to operate?" It's the customer experience that Schlotzsky's is working to enhance, thanks to their CoolCloud wireless Internet access offering. The free service is being installed by franchisees nationwide, and Stitt is enthusiastic about the benefits of entertaining young customers and bringing in the business crowd.

The Internet is also playing a big role in the way potential franchisees get started with an organization. McKinnon says 80 percent of their inquiries come over the Internet, and the Dwyer Group and Schlotzsky's are seeing similar interest through the Web. That leads into the importance of potential franchisees checking into the tech-savviness of a parent company. Monica Landers, director of communications for Schlotzsky's, advises, "It's important to consider whether a company is moving forward. You want to see a company that's keeping up with the times and looking for innovative and cost-saving [methods]. Technology is often the answer to that." The best way to tell is to visit the franchisor's Web site and talk to their franchisees.

Looking ahead, technology will continue to play a greater role in franchises of all types. McKinnon points to Internet training and videoconferencing as big areas of innovation. Bidwell is excited about the growth of the wireless Web and cell phones that aid the real-time exchange of information, which is especially important for franchises that dispatch mobile workers.

It ultimately comes down to the franchisees to decide whether and when to adopt a new technology. Some franchisees who have been around awhile aren't eager to tackle the expense and learning curve of new hardware and software. Stitt, 50 and admittedly not a computer whiz, has a down-home view on this. "Why build a house with a handsaw when you can use a power saw? We have to stay ahead of the curve. Our business is better for it."