Outside Insights | May 2015 | By Guest Author

Your Restaurant, Your Data? Not So Fast

Restaurants rely on data more than ever, but they don’t always own the rights to their historical data.
Quick service owners and franchisees need to negotiate who owns historical data.

Are you shopping for new restaurant performance management solutions? Whatever your reasons or your needs are, before you start shopping, you will want to give some thought to who owns your historical data. It may not be you—and that can significantly impact your business.

These days, good restaurants rely on good data. To grow your company’s profitability, you need not just transactional data to evaluate operations, but also the analytical data to propel your business performance forward. That means you will want all the historical data that your current system has amassed.

That’s where things can get tricky. You may be shocked to find out you may not own your historical data. Unfortunately, some vendors out there are not willing to work with a customer once the customer has decided to move to a new vendor. They may hold your historical data hostage for a ridiculous fee, forcing you to make a hard decision. You can opt to move to the new vendor anyway, without your data, or to stay with a vendor who no longer meets your needs, and for what may likely now be an acrimonious relationship.

One franchisee executive found a vendor wanted to charge his group about $50,000 to release historical data to a new vendor; the vendor’s contract had not mentioned a transition fee. In this case, the executive decided his company could not afford to make the needed transition and unhappily stayed with the current vendor.

There have also been instances where vendors have simply not complied with customers’ requests for historical data. For example, one small quick-service chain decided to transition to a new vendor when its enterprise needs outgrew its reporting system. When the chain informed its existing vendor that the relationship was ending, the vendor flat out refused to even engage in a conversation about transitioning historical data to the new vendor.

One franchisee executive found a vendor wanted to charge his group about $50,000 to release historical data to a new vendor.

Data hostage-taking is an alarming scenario, and an increasingly frequent one. Your historical data is important. Your management team can use that data to make educated business decisions moving forward, whether that’s evaluating the specific success of a new marketing campaign or a limited time offering or tracking your overall restaurant performance. Having historical data allows you to analyze how conditions may have changed over time, predicts how they will continue to transform, and assists in creating informed policies and procedures for future success.

That said, don’t be afraid to leave a vendor without your historical data—your business’s future profitability is more important than a data set. You’ll immediately begin building new historical data with your new vendor.

You likely weren’t aware that data ownership might be an issue when you negotiated your contract, but you will certainly want to discuss it before signing a new contract.

“Unfortunately, some vendors are refusing to release customers’ historical data, which not only has significant financial implications for the customer, but also destroys the existing vendor-client relationship. That is not the way to build customer equity,” says David Bennett, CEO of Mirus Restaurant Solutions, a provider of reporting and analysis for the restaurant industry.

“Looking ahead, you’ll want to safeguard your data with whomever you choose to do business,” Bennett adds. “Make sure that you have transparency with your vendors, and specifically that contracts have a transition clause that will allow you to change vendors in the future without exorbitant costs to you. That way, you can ensure you will have the information you need to make the right decisions for your business’s future.”

Now that you are aware of the data ownership issue, what’s next? Bennett recommends four steps to help guide your actions in the future, to ensure your system transitions are as smooth and seamless as possible.

First, review your contract to determine if it includes an exit option. Whether it does or not, do not be afraid to change vendors when your business needs demand it. Remember, Bennett says, you should be looking to the future, not the past.

When considering a new vendor, ask questions specifically about data ownership. How the vendor responds will speak volumes about their business ethics and commitment to customer service, Bennett says, even to customers leaving their service.

Review a potential vendor’s contract before signing it to make certain there is a transparent exit option. If the vendor does not have an exit option and is not willing to add one, Bennett says, don’t sign the contract (and find another vendor).

When transitioning from one vendor to another, maintain open communication with your outgoing vendor to ensure he is complying with your expectation of data transition. Bennett says it will take time to transition your data to a new vendor; 15–30 days is reasonable. Any longer than that and you should start asking questions.

Most vendors value their reputations and are in business to help their customers, not to harm you. By doing your homework, talking to several vendors and asking the hard questions—including about data ownership—you can make sure that you’ve got the right restaurant performance management solution partner—and that your data will always be yours, as it should be.

Brenda Fried is president of Harbor Bay Consulting Ltd. and has more than 20 years’ experience in the foodservice industry. Her work experience includes nonprofit, for-profit, and operator supply and solution providers.

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