In the following article Michael Johnson, the Managing Director of the market-leading franchise Card Connection, gives his opinion on how technology will affect franchising in the future: in the areas of efficiency, business models, training, marketing, franchisors’ responsibilities, and positives and negatives.
"Whatever sector we look at, advances in technology are going to play a key part in changing the way our franchisees work in the future. 25 years ago the internet was just beginning to arrive on the scene and now it is hard to imagine working without email or access to a Wi-Fi connection.
There is no doubt that the internet, like the introduction of other new technologies to come, has and will increase our efficiencies. We all recognise how, in recent years, we seem to be able to ‘do more with less’ and this is largely possible because technology can make repetitive processes automatic. Technology is the way to help us cope with this faster pace of business life that is unlikely to slow down.
Franchisors, therefore, will be required to move with the times and investigate how technological developments can benefit their franchisees. For example: at Card Connection a number of years ago we introduced web ordering for franchisees to order stock, and more recently we brought in a handheld electronic terminal which revolutionised our in-store paperwork. This vastly reduced the amount of paperwork that franchisees needed to complete, giving them more time to spend earning.
Technology will change business models and franchisors need to be up to speed with these adjustments too. Some industries may actually disappear, while others will transform beyond recognition. For example: in the greeting card industry in recent years, consumers have seen the introduction of internet ordering for personalised greeting cards. Currently this only accounts for around 4% of the market and has had no perceivable impact on retail sales. However, it is an illustration of a new and slight shift in buying patterns which is a direct result of the technology now available to enable low-cost personalised printing.
There may also come a time where it is possible to print a greeting card using a ‘hole in the wall’ machine in a retail outlet. One may be able to select the wanted image, choose the text, and print it all there and then. As a franchisor we are aware of these possibilities and are constantly monitoring the market place to see if and how they will impact on our franchisees both positively and negatively. We look for threats, but more importantly we look for opportunities, as any sort of developments can bring both. Other franchisors need to do the same.
Technology will change how we train our franchisees too. Already the use of video tutorials can help bring mentoring to life and these days many franchisors use online training packages. This can reduce the ‘man hours’ associated with training, although there will never be a complete replacement for the benefits of on-the-job training, and so a move to a ‘blended’ learning approach is more likely.
Marketing is also an area currently being influenced by technology. Businesses are rapidly realising the powerful reach of social media and its ability to target defined audiences. The low cost, ease and speed with which marketing campaigns can be spread through social media is likely to be something that franchisors will start embracing rapidly, taking advantage of it on behalf of their franchisees.
Whatever the future holds, the franchisor’s responsibility will remain the same: to protect and ensure the future income of its franchisees in order to help maximise their profit margins. Therefore, time invested into understanding the ways that technology can improve efficiency will be time well spent. Considering both the threats and the opportunities that such developments can bring will be essential for success in the future of franchising."