How to prepare your franchisee for success? – Part 2

In our previous franchise tips on how to prepare your franchisee for success? – Part 1  we saw how to involve your franchisees in budgeting and planning for the business. In this post on how to prepare your franchisee for success? – Part 2, we will understand the purpose of franchise technology fees and how to  maximise technology as a resource.

Looking back at the past year proves that technology has become an integral part of all business types, in particular for franchise brands. It is important to understand which franchise technology tools to use. As they must deliver practical benefits and must be easy to implement and use. In other words, take the time to thoroughly evaluate your current technology and technology fees, so you can better determine what will benefit your brand in the year ahead.

Franchise Technology Fees

Technology fees are paid by the franchisee to a franchisor to add, update, or upgrade required business tools and systems. In a review of 2,191 FDDs conducted by FranConnect over a 3-year period, they found 61% of franchisors collect technology fees from their franchisors (charged through a monthly recurring flat fee). The interesting part is that 50% of franchisees claim that technology tools were among the top values a franchise provides.

It has become the standard for ensuring a franchising organization can keep up with a rapidly evolving competitive environment. Review and amend the amount you are collecting as technology fees in order to be able to equip your franchisees with the technology they want and need to grow their units.

Declutter IT resources

An analysis that was based on login activity on Okta’s network of more than 5,600 companies worldwide and a survey of more than 1,200 U.S. workers, was conducted between December 2018 and January 2019. During which they found that small to medium-sized business enterprises jumped from an average of 53 software programs and applications in 2015 to 73 in 2018, while larger firms reported an average of 129 apps per company in 2018.

This overwhelming state of IT affairs results in a lower level of franchisee engagement and utilization of these tools. Thus there is a need for franchisors to move to a centralized franchise management platform. Thereby, all data is made available in one platform while allowing the franchisees to focus on the other important elements of their business.

The best way to conduct business using technology is by enabling a “persona-based” dashboard. In other words, you will be able to see the data that is relevant to your role. For instance, a CEO, will be able to see the most important KPIs across all departments and networks, such as royalty collections, a roll-up of the P&L, unit-level revenues, and franchise sales closings.

On the other hand, someone from the franchise development may want to key in on areas such as new lead creation, response times to new leads, call activity, no-response rates, discovery days, etc. As a result, there is an increase in technology engagement and you may be able to spot and remove redundant applications. This in turn also lowers the overall technology cost and expenses.

Technology is merely a tool. It can be used to either help build or hinder the growth of the business. Reviewing the past performance and adapting to changing developments around you can help you understand how to use this tool effectively to your advantage.


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