No Wires Attached

There's this slightly futuristic commercial showing a guy grocery shopping. He looks a little suspicious, shoving endless quantities of food into his coat and pockets as unnerved customers look on. As he's about to leave the store, he passes through the security sensors near the door and pulls out his credit card. All his items are instantly scanned, his order is rung up and he's ready to go.

In franchising, where food franchises are often on the cutting edge of consumer trends, those days are fast approaching. Thanks to the increasing availability of wireless connectivity, franchises' customers can now get coupons, place orders and even make payments via wireless devices like PDAs and Web-enabled cell phones.

"Even though I'm not a techie, I've always kept up with the latest innovations. When I started hearing about the newest advances in wireless, I thought, 'Why can't we do this in our restaurants?'" says John Wooley, president and CEO of sandwich chain Schlotzsky's Inc.

To take advantage of the impending wireless mania, Schlotzsky's began installing antennae at several of its company-owned locations to provide customers with free wireless Internet access. The cost of wirelessly enabling stores is about $4,000, plus about $800 per month for Internet access, but Schlotzsky's feels the investment is well worth it. "We want to provide a service to our customers and give them yet another reason to come by one of our restaurants," Wooley says. "Our customers' response shows this is a good direction for us."

Other fast-food companies experimenting with wireless technology include Boston Market and Donato's Pizzeria, which let customers place orders via PDAs. And a group of Domino's franchises recently beta tested a wireless terminal that would accept credit cards for delivery orders.

Food franchises are also using wireless technology to improve customer service in areas such as checkout. US Wireless Data Inc., a New York City-based payment product manufacturer, has created the Synapse Enabler and Synapse Adapter to increase transaction speed at registers. "If a fast-food chain has five existing dial-up point of sale devices, it allows them to rip out all five phone lines and plug those dial-up terminals into our concentrator. Instead of sending the transaction via telephone line, they send it via wireless," explains Dean M. Leavitt, president and CEO of US Wireless Data.

This technology helps make credit-card transactions at fast-food franchises move as fast, if not faster, than cash. "The key issue is speed. We drop their transaction from what is typically 30-some odd seconds to a sub-four second speed," Leavitt says. "If you have a high volume fast-food location, with four or five lanes 15 people deep during a busy lunch, you need a fast-as-cash solution."

And as the desire for points, miles and cash bonuses increases, more customers want to be able to use their credit cards for transactions. Ease of use also makes credit cards more desirable than cash, and locations that accept credit cards reap the fringe benefits. "Where the merchant really benefits, in addition to speed and cost reduction, is incremental sales," Leavitt says. "Study after study has shown that when you introduce card acceptance, average ticket sales go up. A customer might, if using credit cards, have that dessert or the extra large fries."

In fact, these innovative food franchises have come so far in their wireless quest, now they have to wait for more consumers to catch up. Before the majority of fast-food chains offer high-speed cashless transaction or free wireless Internet access, wireless devices have to become more common, a buildup already in the works. "There are the early adapters, who love the latest technology whenever it's available; the majority of people, who say, 'I'll use it when it's more comfortable and the bugs get worked out'; and the Doubting Thomases [who have] to be surrounded by everybody else doing it [before they try it]," says J. Gerry Purdy, principal analyst with Cupertino, California-based wireless data consulting firm MobileTrax LLC. "But eventually everybody will use this mobile and wireless commerce function. We just haven't reached that point yet."