Hireology’s endless pursuit for franchise insight and the latest industry trends continues, thanks to another valuable discussion with Mary Ann O’Connell.
Mary Ann O’Connell is a Certified Franchise Executive (CFE) and is the President of FranWise®, as well as an active member of the IFA with over 30 years of franchising experience. Last time we spoke with Mary Ann, she was kind enough to share part of her franchising story, including insight she has with technology being used in the industry.
To follow-up from our last discussion, we asked Mary Ann a little more about franchise technology, in addition to the state of today’s franchising model.
Q & A with Mary Ann O’Connell
Hireology: Last time we spoke you mentioned that investing in good technology, such as a LMS and intra/extranet system, can lead to a huge financial gain for franchisors. If a franchisor wanted to start a new brand, what would be their first step in finding those great technologies and what should they look for within each system?
Mary Ann O’Connell: That’s a very broad question because every company has different needs. But, they should start with an intranet (where they can house documents and manuals) and a compliance module, which is critical from day one. If the franchise system requires a build-out process, they should consider a module that tracks their process. LMS systems are popular and a great tool to assure that your training is delivered consistently, but check with counsel as to the limits of training and tracking the franchisees’ employees.
In terms of investing in technology, should franchisors build their own technology, like a POS system, or should they buy one that’s already in the market? What are the pros and cons of home grown versus bought technology?
You may have noticed that I am speaking about “modules.” The franchise model is about replication and scalability, so I recommend franchisors apply that principle when choosing suppliers. There are at least three excellent franchise management systems out there (alphabetically) FranConnect, FRM and IFX. They each have strengths and weaknesses and a franchisor should choose the one that best suits their system and data management style. POS systems are plentiful and many are already customized for business verticals such as food service; integrate with QuickBooks and/or are quickly and easily modified and private labeled. We do recommend that the franchisor use a single POS so that all the reports are centralized and roll up without much effort on the part of the franchisees.
In general, designing proprietary software is not a good idea, particularly for a new brand. It takes focus away from the main business, which is franchising. If the franchisor’s core business is not software development, it will draw too many resources and if/when the developer leaves, the coding is interrupted unless the franchisor has an additional person - and we are back to a drain on resources. In time, when the system is generating positive cash flow, it makes sense to look at this again and see if a change is needed.
Can you give us an example where technology played a major positive role in your past experience?
Those examples are countless! We are grateful for franchise management systems daily because our clients post their manuals there, making them accessible, current and searchable. Other things that have worked well for clients and former employers are tracking phone conversations and emails that were needed to quickly settle a dispute; franchisors getting more participation and better data for use in Item 19; tracking store openings. Before tech solutions, there were weekly calls between the franchisees in the development process and development managers. These calls went through all the items on a checklist and track the progress. It was slow, repetitive and always looked back, not forward. Now franchisees can work at their own pace with the process laid out for them, the development manager is always current and problems can be addressed at the speed of electronic communication.
Concerning the NLRB Joint Employer Ruling, what advice would you give franchisors to ensure they avoid litigation with their franchisees?
This is a legal question and I am not a lawyer. So, always hire the best attorney you can afford and ask, don’t guess. When dealing with joint employment issues, the franchisors’ best resource might be an employment lawyer, not their franchise counsel. Their franchise attorney's firm might have a labor law practice, so ask.
How can emerging franchisors effectively communicate and educate their franchisees on the importance of the franchising model? How can you encourage them to tell that story on every level? (For example: A franchisor to their own internal employees, a franchisor to their potential franchisees or a franchisor to their existing franchisees)
You have two different questions here. The franchise model is very misunderstood at the level of their employees, let alone the franchisees and the franchisees’ employees. I highly recommend they use the excellent training material that the IFA developed called, @ Our Franchise (atourfranchise.org) as they do orientation for their employees, at each franchise training and encourage the franchisees to use when they do employee orientation.
It is also important to build the brand culture and “tell the story” to everyone. The story sets the culture and the culture drives the values.
It starts with the franchise licensing process where the culture and history have to be used as one measure of a candidate’s ability to meet the profile. Told well, it is also a great tool to build excitement that sustains the prospect through the long process. Then carry it through in orientation/training, the Operations Manual, the website … every meeting! Never lose the history because there is an emotional connection to that story of the first convention being 9 people in a hot tub (true story).
Several years ago at the Women’s Leadership Conference, Jim Rogers, the then CEO of KOA Campgrounds, told about acquiring the iconic brand where no one had any connection with the history. Their brand was about building families memories, and they had not lived the promise. So they went on a hunt for the original and long-time franchisees and sat, listened and recorded the stories. They are now an integral part of the system and the current franchisees developed a stronger loyalty to the brand once they understood the people and the heart that built it. They could relate.
Here is a great time to use the intranet site and have a history section, add to it at each meeting. Include it in the training and orientation materials and make those part of the material the franchisees can use, too.
More franchise insights and advice from Mary Ann to come soon. Until then, check out how Hireology’s technology can save your franchise time and money by clicking on the link below.