Not Your Father's Cash Register

Point-of-sale systems help franchisors and franchisees manage all aspects of their business.

By Devlin Smith

Opinions expressed by Entrepreneur contributors are their own.

For today's franchisees, the days of cash registers being used only to ring up sales are long gone. Companies like SEI Information Technology Inc.are ushering in an era in which these machines are being used for everything from tracking inventory to scheduling employees. "In today's environment, franchise operators need much more than just the old cash register," says Gregory Lewis, general manager of customer care for Chicago-based SEI.

The cutting-edge capabilities provided to SEI clients, which include companies like McDonald's and Allied Domecq-franchisor of Baskin-Robbins, Dunkin' Donuts and Togo's-include scheduling and cash flow management. "These systems have gone far beyond point-of-sale," says Lewis. "They've become management tools, allowing franchise operators to more effectively manage their business and squeeze out more profits."

SEI began working with franchises in 1988, when it developed a point-of-sale system for McDonald's.

And in addition to developing the software and aiding in software implementation, SEI offers 24/7 help-desk support to all clients. Earlier this year, SEI signed up Aspeon Inc., an Irvine, California, point-of-sale solutions provider whose client list also includes McDonald's, as its help desk. Using their knowledge of franchising, SEI is helping its new client base of Aspeon users with every aspect of operating the point-of-sale systems, from initial implementation to everyday use. "We understand our customer's business, so if they have questions like, 'How do I get my cash to balance at the end of the day?' we can help them with that," Lewis says.

SEI also provides on-site training for franchisees and their employees-training that's sometimes covered by a system's franchise fees. In other cases, the franchisee independently contracts with SEI and Aspeon. But even in those instances, Lewis suggests getting the franchisor's input. "I'd start by asking the franchisor for a recommended list of suppliers," Lewis says, because franchisors may have purchasing agreements with certain suppliers, which would lower costs for franchisees.

But the best thing for franchisees--and their franchisor--is to implement a single point-of-sale solution systemwide. According to Lewis, having a standard system can make it easier to track sales and introduce new products.

The systems can also be used to make promotions run smoothly. "In the case of McDonald's Beanie Baby promotion, in some locations, the stock [of toys] was depleted in a matter of hours. But in certain parts of the country, the demand wasn't really there," Lewis explains. "With these systems, McDonald's now has [access to] information about the success of their promotions within a matter of hours and can determine if they need to reallocate inventory. If they could have diverted that Beanie Baby inventory to [locations] where there was a lot of demand, it would have helped their franchisees."

By providing that kind of data to franchisees and franchisors, this new generation of point-of-sale systems ensures businesses run smoothly.and perhaps more profitably to boot. "In terms of just pure information, the franchisee has more timely information about their business," says Lewis. "And once they have that information, they can do a much better job of managing that business overall."

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