The Winning Franchise Formula: Balancing Global Control with Local Autonomy

February 27, 2023

Tags: #IFA #franchise #franchising #franchisor #franchisedevelopmentfranchisebusiness

As the CEO of a leading cloud-based point of sale solution for franchises, I’ve had the opportunity to work with hundreds of businesses. Over the years, I’ve seen great variation in the level of centralized control that franchisors maintain over standard operating procedures followed by individual franchisees and, by extension, the end customer experience. 

Every brand has its own winning formula, and a software system designed for franchises should offer the flexibility to support access controls that enable the control you want. Analysis of our data indicates a set of common principles that correlate with faster franchise growth and higher customer satisfaction scores. 

1. Client Records Should Be Global

Customers expect to visit any franchisee with your brand name and have their information readily accessible. They want their client notes, purchase histories, waivers, memberships, and loyalty points to follow them. It’s frustrating to walk into a familiar brand and find that they have no record of you, and it diminishes the value of your brand. 

Consumers also expect tailored communications, and a single unified client record is necessary to personalize your marketing communications in content and cadence. It’s awkward to send an automated reminder to come back when someone was just in, but at a different location.

Finally, you can only know a customer’s lifetime value, visit frequency, upsell potential, or buying habits if they have a single client record. I’d argue that you cannot make data-driven decisions without a global client record. 

2. Gift Cards, Memberships, and Packages Should Be Global

Stored or prepaid value items like gift cards, memberships, and packages are more useful and will be purchased at greater frequency when consumers can use them at any franchise location.

Starbucks was smart enough to make gift cards usable anywhere, making them a fantastic 

convenience tool and common gift item. The program’s success speaks for itself, as the Starbucks card accounts for over 40 percent of its reported revenue today. 

Global gift cards and memberships can pose challenges for reconciliation, but these can be solved automatically and seamlessly by your point of sale software. In addition, sophisticated systems will move funds through automated bank withdrawals to ensure that everyone is made whole at the end of the day.

A rising tide lifts all ships, and the more gift cards, packages, and memberships that are outstanding, the greater your brand loyalty and visitor frequency will be, and that’s good for franchisors, franchisees, and consumers alike.

3. Services, Products, and Promotions Can Be Hybrid

The fastest-growing franchises have consistent service menus and product offerings at all franchisee locations but still offer franchisees the flexibility to offer local SKUs that make sense in their respective markets. Similarly, some coupons and promotions benefit from being distributed on a national scale (like a Valentine’s Day special). In contrast, others make more sense only at the local level (like one affiliated with a sports team).

In speaking with our franchisors and franchisees, they tell us that consumers respond best to mostly consistent offerings across locations but nevertheless seem to appreciate the delight of finding a hyperlocal offering they weren’t expecting. 

At the very least, any SKUs carried across all locations should be set up centrally in your POS so that it’s easy to analyze data from every location. For example, imagine that your 60-minute hot stone massage is called something different at each location, and your software doesn’t recognize it as the same SKU in each store. It would become difficult, if not impossible, to understand sales and customer trends related to that SKU at scale. 

There are amazing and powerful machine learning and AI-driven tools coming onto the market today, but remember that they only work if you feed them clean, real-time data from your franchisees. If a system cannot understand customer preferences and habits, it can’t effectively market or improve the offering.

In Conclusion, Be Global with Local Flair

Successful franchises focus less on individual experiences and more on building a strong brand that each location adheres to while empowering “local personality” to shine through as franchisees know their markets best.

As you continue to develop and scale your franchise, an agile, cloud-based software platform allows you to experiment, learn, and quickly implement changes across all your locations to grow your business and maintain a unified brand identity and customer experience.

Read the full article in IFA’s 2022 IFA Supplier Source Book

Let MyTime handle every aspect of your business scheduling, and POS needs so you can get back to doing what matters the most. Book a demo today!

All Tags: #IFA #franchise #franchising #franchisor #franchisedevelopmentfranchisebusiness