When opening a franchise, there are a lot of upfront costs that franchisees have to consider. Beyond the obvious such as food costs and labor, the cost of technology to help run the business—including point-of-sale software and back-of-house management systems—can add up quickly. To ease those costs and simplify getting started, some franchisors have started providing their franchisees with turnkey technology.
It’s not difficult to see why: Franchisees stand to benefit economically and logistically from including a technology package in franchising costs, while franchisors get to reap the benefits of having all the information they need at their fingertips at a moment’s notice.
Turnkey technology packages can include virtually anything the franchisee needs, but they often include features such as an online ordering platform, which can increase sales; a proprietary POS system including encrypted credit card purchasing that is PCI compliant; a fully integrated loyalty app for customers that includes geolocating capability, nutritional info and more; text messaging; email clubs; and back-of-house management systems that help manage food and labor costs.
A win-win solution
From a consumer standpoint, it’s ideal for franchise locations to prioritize technology. According to Technomic’s 2016 Takeout & Off-Premise Dining Consumer Trend Report, nearly half of consumers (48%) say they’d be likely or extremely likely to use online ordering via computer, while 40% of consumers say the same about online ordering via mobile device.
And because diners are looking for that convenience, online ordering platforms can increase overall sales—on-the-go diners know their order will be ready when they walk in, rather than having to wait in a long line during a busy lunch hour, for instance. John Griparis, a franchisee and area director for Jersey Mike’s Subs, a fast-casual sandwich chain with locations across the United States, says, “I think any restaurant has got to stay with what’s happening, trend-wise. Online ordering is huge.”
Beyond boosting sales with online ordering, technology packages can help franchisees better control food and labor costs—and in today’s highly competitive environment, margin management can make or break a business.
Streamlined business practices
Franchisor-provided, all-inclusive technology packages are also beneficial to operations as well as the bottom line. Beyond saving time, these packages can save money and headaches by way of streamlining different aspects of running a restaurant. Some areas of running the business are more complex than others, such as PCI compliance—the standards for ensuring security when accepting credit card payments. Jersey Mike’s Subs is one such franchise that offers its franchisees a turnkey technology package.
Bob Middleton, a multibrand franchisee, says he’s glad to have it in his Jersey Mike’s locations. Without it, he says, “You end up using third parties … it’s very expensive. PCI compliance is extremely complicated. I get a lot of peace of mind by having the parent company take care of all of the PCI compliance.”
An investment, not an expense
While technology packages are part of the cost of opening a franchise location, many franchisees see it as a worthy investment rather than just another fee, especially for franchisees that own multiple locations. Griparis points to the accuracy in monitoring costs as a benefit of having an in-house tech package.
“Eight years ago when I joined Jersey Mike’s, you would know what your cost of goods were from your P&L, but at the time, we had no way to measure the cost of goods as far as variance against theoretical or ideal food costs,” he says. “So you could spend a lot of time trying to analyze. The technology package has really just brought us to where we need to be and beyond, and I think we’re just scratching the surface, truly, of where we can take it.”
This post is sponsored by Jersey Mike's Subs