Rolling Out New Trends

In August 2006 Frantz Group conducted a survey of quick-service restaurant franchisors on the topic of technology. The intent of the survey was to better understand the relationships between franchisor and franchisees with regard to new technology selection and rollout.

In that survey, the Frantz Group found franchisors’ No. 1 criterion when rolling out new technology to franchisees is franchisee satisfaction. Top challenges regarding rolling out technology to franchisees were keeping costs low and making adoption faster and broader among franchisees. Mandates were the No. 1 tactic used by franchisors to drive technology adoptions, but participants realized that strategy had its flaws, namely that mandates are not always successfully adopted and often alienate franchisees instead. In 2006, the top technologies as measured by “looking to replace” plus “looking to add” were POS, broadband service, video surveillance, and back-office tools. Franchisors cited revenue growth, employee training, and quick response to market changes as challenges they anticipated facing well into 2007. Interestingly, few planned to turn to kiosks as a solution for any of those issues.

In 2007 Frantz Group decided to do a parallel study of franchisees to determine how franchisee perceptions were the same or different from those of their franchisors. Franchisees rely on technology to free up their time, create efficiencies, improve customer satisfaction and loyalty, increase revenue and profitability, optimize labor/staffing, and stay ahead of competition.

Highlights of that survey include the news that franchisees see a very strong and important relationship between the success of their business and technology. Franchisees look to their franchisors for vision and direction in selecting new technologies—particularly as it relates to defining the technology roadmap for their stores. Overwhelmingly, though, franchisees want more control and more choices in the technology rollout process than currently allowed by franchisors. Franchisees’ top concerns regarding technology adoption include: cost of maintenance/support, training/knowledge to use it, and installation headaches.

Also according to the survey’s finding, franchisees view the technology acquisition experiences as the weakest area of solution support and training. The biggest reasons franchisees invest in technology are to improve operations and to increase revenue. Results show that franchisees recognize that franchisors typically have superior resources and bandwidth to research new technologies and prospective vendors, as well as a larger base to test new technologies in the store environment. However, franchisees would prefer that franchisors rely on pre-negotiated deals with multiple qualified vendors, giving franchisees an opportunity to make an informed decision on the final vendor.

Many franchisee respondents reported negative experiences about specific technology mandates and recommendations that have occurred in the past. As a means to alleviate those negative perceptions, franchisees suggest that when mandating specific technologies or vendor solutions, franchisors offer specific examples of ROI from other franchise locations or corporate stores to help franchisees fully understand the expected benefits and return on investment.

Franchisees want to be consulted to help shape the brand’s technology road map. They want chosen solutions to be fully tested in a real store environment. They want better communication from their franchisor about what to expect and when. They want more choices as far as vendors are concerned. They want more education on the solutions, and a clearer understanding of benefits and return on investment. They want more tightly managed, smoother implementation processes. They want training on how to use the new technology.