Franchise IT: Trying To Not Knock Over The House Of Cards

Written by Todd L. Michaud
August 5th, 2010

Franchisee Columnist Todd Michaud has spent the last 16 years trying to fight IT issues, with the last six years focused on franchisee IT issues. He is currently responsible for IT at Focus Brands (Cinnabon, Carvel, Schlotzsky’s and Moe’s Southwestern Grill).

Implementing retail technology in a franchise environment can be like building a house of cards. Each franchisee is likely to be slightly different than the next or have a slightly different requirement or slightly different existing technology. Although each these variances may be small and seemingly unimportant when viewed alone, the more variances there are–and the longer they remain outside the standard–the more unstable the foundation of the “house” becomes.

To make things more challenging, the person who had the implementation role before you could have stacked the deck against you. It is much easier to say “yes” to a request for something different than it is to say “no.” In most cases, these requests will genuinely move the business in the right direction. But that’s a double whammy: It means your predecessor may have created a field of variance landmines that you must painfully discover on your own.

Let me use an example from my own world to help describe this challenge. I have been tasked to work with my operations partners to deploy a new credit- and gift-card program to one of our brands. We have negotiated a contract at the FOCUS Brands level that will provide cost savings to each franchisee over its existing plan. The brand currently uses three payment application platforms on three different platforms, each representing a different stage in the brand’s history (the franchisee purchased whatever was approved at the time).

The goal is to convert roughly 300 locations to the new platform in just over three months. Although this task seems fairly straightforward, unfortunately, it is not. Until we got into the details, we did not see the variances that make this project a real challenge:

  • Of the roughly 150 locations on the most recent platform, we discovered that 100 purchased their systems from the manufacturer (per the Brand Program) and 50 purchased their equipment through a reseller/dealer.
  • Of the roughly 150 locations on the most recent platform, many are using only the manufacturer’s software rather than both it and the hardware platform. Their hardware has come from unknown sources (other restaurants, eBay, etc.). This variance has become important, because we discovered some of that hardware does not have the capacity to run the software required for the new program.
  • Some of the locations have taken the initiative and integrated their credit- and/or gift-card processing into their POS on one of the non-approved platforms.
  • Some locations are current on their hardware and software maintenance while others are not. This variance means the new upgrades could cost anywhere from nothing to several thousand dollars, depending on the state of the franchisee’s system and its current provider relationship.

The list goes on and on. Each of these variances was likely a decision made with the best of intentions at the time. Why wouldn’t you want a franchisee to save money purchasing its system or speed up its operations by integrating its credit-card processing? Now that it is time to deploy a new national program, however, these variances are huge obstacles to overcome.


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