1. Lack of consistent business processes in all areas including franchise sales, pre-opening, operations, and franchise administration.
2. Lack of IT infrastructure that enables the organization to manage their business processes.
3. Lack of analytics/reporting tools that enable management to benefit from business intelligence, or monitor and improve the business.

This is an excerpt from a typical conversation…

Us: “Can you briefly walk us through your franchise sales process.”

Franchise Exec: “Sure, we receive our leads through various portals or from our corporate website. The leads are emailed to a sales person (or our sales team) then entered into a spreadsheet.”

Us: “Ok, then what?”

Franchise Exec: “Then the salesperson follows up with the lead to see if they’re qualified and if so we send them an application to be completed.”

Us: “I see. What happens next?”

Franchise Exec: “If the application is returned, we review it to see if the prospect meets our initial requirements. If so, we send them a copy of the FDD, then we’ll invite them to our corporate office for a Discovery Day.”

Us: “What happens after the corporate office visit?”

Franchise Exec: “Well, we just follow up and answer any further questions; discuss the FDD; possibly refer a financing contact. You know, work on getting the agreement signed.”

Us: “Sounds easy enough. So, what’s the problem?”

This is where the conversation usually gets interesting and I say that for this reason – most folks begin to identify their symptoms, not their problems.

“We need to generate more leads.” Symptom.

“We are not meeting our goal for number of franchises awarded.” Symptom.

“We are not able to award franchises in the markets that we want.” Symptom.

“I don’t know what my sales team is doing on a daily basis.” Getting warmer, but still a Symptom.

Now, we could list symptoms for days. But the truth is that until the underlying problem is identified it cannot be solved. I would encourage you to begin working to identify the problems that are the root causes of your symptoms. Try starting with the problem breakdown that I listed above to see if this fits your organization.

As always, I would welcome your feedback.

Like most people we speak to, this organization is using spreadsheets, outlook, old versions of ACT and other fragmented tools to run their business. In reality many of these folks cannot tell “come here” from “sic ‘em” without involving many hours of effort and people’s time. There is no 360 view of the business. There is no coordination of communication, orchstrated work flows and as a result there are many more people being employed to do mundane things. Even more obviously, what those folks ARE DOING is not nearly as productive as it could be. This is usually acknowledged by the people we talk to and then, as in our call last week, comes THE DISCUSSION. What’s the price ?

Now price is an important variable and its an important question. I mean you have to deliver value for the dollar. We understand that and really see this as our primary advantage. For this ZOR the price would be a mere one hundred and fifty dollars a month. That’s right $150 a month. What was surprising is that THIS WAS OBJECTIONABLE. Can you believe it ? I can’t. $150 a month is a mere $1,800 a year to have something that actually helps you MANAGE your business instead of it managing you. $150 a month is what many companies spend on a single mobile telephone bill per executive manager. It’s a single dinner with a franchise prospect. It is less than 10% of the average franchise unit fee. How is that objectionable?

Do you think franchising generally has ignored the benefits that technology and systems offer? What can explain this type of thinking? We continue to mine for the insightful ZORS who can see the value in the franchise flywheel. Can you help us find some more evolved ZORS to speak with?

Trouble is, if you take a moment to calculate what the cost of all this technology and maintenance is for your company you might be surprised. Upgrades, hardware maintenance, software licenses all add up. Don’t even mention that you are unable to really manage what folks are up to on a day to day basis.

To make this more challenging your people aren’t able to take full advantage of things like their smart phones, mobile internet access while they are on the go or at home, social media, and other advancing technologies. These tools would help them be more productive in serving customers or developing new business.

What is even more troubling is if you are relying on a third party vendor, which might have financial issues you are unaware of given today’s environment, to manage and host your Intranet content or business systems based on a proprietary infrastructure. You may have some real trouble ahead. What happens if they fold ? What upgrades are they making to integrate new tools ? What is your “exit” strategy ?

You have a problem. The good news is there is a solution. You just need to gather the will to understand the tremendous risk and opportunity that  all organizations face today around their information systems.

With all of the advancements in technology available to organizations today, particularly with the cloud, you really really have to sit down and take account of how you are using your IT and strongly consider shifting your strategy to the cloud….Entirely to the cloud. Sooner not later would be a very good idea.

Watch Mark Benioff CEO of salesforce.com explain the cloud, technology and what is happening and why you should jump in. Don’t wait and let your competitors beat you to the punch.

Unfortunately some organizations attempting to make significant changes in their information systems never realize their true potential. Often the “system” or technology is blamed as the reason. While there are flawed systems out there, they are rarely the key cause.

Putting aside the pros and cons of alternative IT solutions on the market, several barriers exist to realizing the opportunity information technology systems offer. A key one is the potential a system can deliver as opposed to what people actually do in their day to day functions. These two worlds are most often quite varied. The trick is understanding this gap and wisely designing an implementation plan that takes into account some important and practical considerations. This can be a painful and time consuming process, but failing to embark on the effort often leads to poor outcomes. The technology works great but goes unused.

People don’t like change, so no matter the opportunity change offers, it is rarely the technology and more often how people are included as part of a solution in tandem with a thoughtful plan that results in a system being more successful. Therefore, some key disciplines should be applied when implementing new information system technologies:

1. Identification of a single person in charge of the project;

2. Involvement of all user departments;

3. Documentation of extant business practice and process;

4. Documentation of the ideal process outcomes of a new system;

5. An assessment of staff skills as it pertains to the new technology;

6. Identification of specific steps required to shift from the extant practices to the new practices;

7. Identification of resources required for extra work and time involved in making the switch;

8. A training plan for staff to upgrade their technology skill and use of the new systems; and

9. Establishing a realistic time line with implementation phased in by appropriate functions.

Getting organizational buy-in is key. People need to understand what the opportunity is and feel they are part of its adoption. Also, having an implementation plan is crucial.  However, adhering to the nine disciplines above is difficult. Often businesses are going through change which heightens the need for improved business process that IT facilitates.  The solution is needed sooner than later and its common to let the details get “figured out later” when one has a general conception of how things might be, particularly when based on slick new potential that technologies offer.

To illustrate how important some of the nine disciplines are consider one: the documentation of extant business process and practice. If you are upgrading to a new system why should you be concerned about understanding the details of the existing system ? It is common for management to believe they understand present methods being employed in their own companies. After all they work there and often had a hand in designing processes. However, the devil is in the details, so while many an executive will tell you they know how existing processes are working today, many times they do not intimately understand them. Turnover, inattention to an area, or other factors may be the cause. Regardless of the reason, understanding how things are really being done is a critical first step in both identifying the greatest areas of opportunity but also in reducing the number of unanticipated gaps that may emerge in implementing a new solution. The painful reconciliation of the present to a glorious future is critical and people are often surprised at the outcome of the process. The discipline also serves to illustrate important aspects of a culture that may be impeding implementation; if an existing system is not working today because employees refuse to adopt tools or have not been trained, there will be a similar failure of adoption with any new system.

Another example of why the nine point are important can be demonstrated by contemplating this one: documentation of the ideal process outcomes of a new system. Specific outcomes are important to identify what the result should be. There is a difference between the general notion of an outcome and clear identification of exactly what will occur. It also important to know what exact requirements are part of the outcome. For example, if certain data or functions aren’t being performed reports won’t be generated. That wouldn’t be a failure of the system. It is often assumed the “system” alone is the solution; it is unfortunately not. The solution is a wise and integrated application of technology tools with an important understanding that people are its users. Just as a quality franchise concept can fail in the hands of a poorly oriented franchisee, so can a quality information system fail in the hands of an unthoughtful adopter. Achieving fantastic IT outcomes is as much about having a disciplined organization that understands its application and is using the tool. Again, the system is only a tool, it is not THE solution.

In closing, adoption of these 9 disciplines might require more time but is well worth the effort and critical to success. The next time you are considering the adoption of a new IT solution, keep these important points in mind.

Many franchisors utilize Twitter to communicate their products and services to would-be customers.  But how do you know if your social media efforts are paying off?  Can you pull up a real-time report to see just how many new leads you’ve created over the past week?  If you find an interesting conversation taking place about your franchise opportunity, are you able to effectively get a business development rep involved and respond in real-time?

We’ve posted this video to demonstrate the powerful functionality that’s created by integrating Salesforce and Twitter together in your franchise lead generation process.

Check out this video for an overview of the benefits of a Google Adwords and Salesforce mashup.

Sophisticated franchise companies will have multiple lead generation campaigns in place, at all times, and in various mediums.  The ability to integrate every lead, regardless of entry point, into your pipeline in real-time and rapidly route, contact, qualify, and follow up with these prospective customers (franchisees) would have at one time put you head and shoulders above your competition.  Today, it’s a fundamental process that every organization needs to achieve long-term success.  And it’s not enough to have a structured sales process in place.  There should be quantifiable objectives and goals built into the process, along with the ability to track analytics at each step, so that a process of continuous improvement and a true reality can be seen in order to make the best decisions.  The picture below is a good illustration of various entry points and a lead capture methodology.

I hope that this video will be helpful in learning a bit more about the way that we have worked with others to develop effective lead flow management processes and tools.

1. Understand HOW and WHERE to engage qualified prospects;

2. People trust others more than brands, so franchisors need to mobilize their fans and followers to be cheerleaders. Consider this: franchisees are now the “creators” and “sharers” and “distributors”;

3. LISTEN: 3.5 billion brand conversations happen every day in the cloud and few pay any attention to them;

4. Franchise brands must be more honest and authentic: (a) only 5% of people say they believe ad claims, (b) half of consumers say brands don’t live up to promises and (c) franchisees are even more cynical, often for good reason;

5. Forget MASS anything; it’s ALL about customization;

6. Learn Digital or Die;

7. Measure as much as you can. Learn analytics and USE them;

8. Social media does not do everything; there needs to be integration with traditional vehicles of communication, but “pushing” tactics will not work. It’s now all about Inbound, i.e., customers and prospects pulling in a company’s message; and successful franchisors need to think more about communities than campaigns, learning to “crowd source”.

Successfully employing these strategies is hard for brands to do, primarily because they don’t have the tools to systematically perform these disciplines. Answers, however, are available. A quality solution that relies on the latest tools and trends can set a brand and organization apart, leading to true and lasting recruitment solutions that work.

I came across a rather interesting question that was posed on Linkedin yesterday which prompted this post. The question was “Which thesis about IT within emerging franchise networks most appeals to you?” The author, Heath Waldorf, is putting together a thesis paper and was looking for some insight. I obliged….

Information Technology within franchise systems would appear to be a scarcity judging by the lack of conversation on the topic. A few quick searches about franchising and technology will pull up a handful of dated articles on intranets (which are rapidly becoming a thing of the past), there are two LinkedIn groups dedicated to technology in franchising – one has 23 members and the other has 3. There are virtually no conversations taking place about franchise and IT in the cloud… that’s Facebook, Twitter, Google, etc. The technology playing field is being leveled by the emergence of cloud-computing, whereby organizations can utilize and develop sophisticated business apps without a significant investment into hardware or software infrastructure, and access them via any web browser. Inquiring minds are wondering why there is a lack of discussion in the franchising world about this?

Let’s take a look at what we believe to be 5 of the most important aspects of IT for franchisors.

1. Integration with Social Media- Interactions with existing and prospective customers no longer takes place solely via the phone or email or even through corporate websites. Gartner predicts that Facebook membership could hit 600 million by year-end 2010 and it will be the No. 1 social networking site in all but 25 countries. Opportunities to drive new business development and provide customer service will increasingly take place within social networks such as Facebook and Twitter. If your CRM system does not easily integrate with these social networking sites then your opportunities will be limited. Integrating your use of social networking sites into your CRM system also allows you to develop analytics and set measurable KPI’s.

2. Integration with Mobile Devices- With the rapid expansion of mobile devices and virtually everyone in business having either an iPhone or blackberry these days, we have the ability to access information anywhere and at anytime. Having access to all of your new leads for the day, or being able to pull up a complete view of one of your franchisees while on the road, or being able to solve a customer’s problem via Twitter from your iPhone, are all possibilities. And not only are these things possibilities, but they will become necessity and expected in the near future. Having a technology platform that integrates seamlessly with your mobile devices will have great implications for businesses.

3. 360° Views- Building out a 360° view of your franchise system is possible and is necessary to long-term success. Having a single-source, easy-to-access, view of every interaction with your franchisees from lead through the awards process to pre-opening to training to operational information is vital to creating and improving your systems. Knowing where all your touch points are with your franchisees allows you to create analytics and develop KPI’s and measurable benchmarks for improvement. Making decisions based on anecdotal evidence won’t cut it anymore. Read What is a 360° View, Anyway for more information on this topic.

4. Customization- Have you ever needed to further customize your existing platform? Maybe you needed to add a field or change a workflow process or tweak some part of your CRM system so that it fit your business. How long did it take? How much did it cost? Did your technology vendor understand what you were wanting to accomplish? It’s a poor expectation to believe that an off-the-shelf solution will fit your every need without needing some level of customization. This is where many technology vendors make the majority of their revenue because they understand that you’ll need customizations done. But at that point you’re held hostage because it’s a closed platform that only your vendor can modify. You’re stuck with expensive customizations and upgrade fees.

It will be increasingly important for franchisors to use platforms that: 1) give them the ability to customize themselves, 2) allow business users to customize without the need for a computer programmer, and 3) if advanced customization is needed there should be an eco-system of vendors who can perform this customization thereby creating competition and giving the franchisor an opportunity to pick the vendor who provides the most value. Salesforce.com is one example of a company who fits all three of these criteria.

5. Scalability- What I mean by scalability is that the cost structure is set up to pay for what you use. The advantage of cloud-computing platforms is that there is no hardware or software infrastructure to invest in upfront. A per-user fee is paid in a subscription format. If you want more users, you pay more. If you remove users, you pay less. If you sign a 1-year contract and at the end of that year decide that you don’t want to continue then you don’t renew. A strong ROI is much easier to achieve and risk is minimal when compared with platforms that require an upfront investment into hardware and software, whereby scrapping that plan after 1 year would mean a significant loss of investment.

As always, I look forward to any feedback and discussion surrounding this topic.

What do you see in the future of Information Technology for franchisors?