To convince franchisees to adopt new technology, think like a marketer

At FSTEC, franchisors say getting system buy-in on tech means making them part of the decision process. But sometimes you have to say no to new tech, too.
FSTEC conference
Bring franchisees into the process before you pick the technology, panelists said at FSTEC. | Photo by W. Scott Mitchell Photography.

Restaurant brands routinely view technology as a key to the future, potentially driving more sales and perhaps more cost savings while remaining relevant with modern trends.

But how to get these ideas past the operators who will be responsible for investing in this technology and using it once it’s in place?

To a group of franchise executives at FSTEC in Dallas last week, the answer was relatively simple. “It’s a lot like marketing,” Juan Salas, chief information officer for Smoothie King, said on a panel moderated by RB Senior Technology Editor Joe Guszkowski.

Brands need to market new technology initiatives to their franchisees from the get-go. Get them involved in the process of adding new technology to the restaurants. Get some of the most influential operators on board early. Make them feel vital to the selection of the technology. Those franchisees can be strong advocates.

“They’re going to listen to them more than they’re going to listen to me on technology,” said Pankaj Patra, chief information officer for Chili’s owner Brinker International.

Restaurant technology has become a central part of many chain’s business plans. Loyalty programs, robotics, artificial intelligence and machine learning technology has ushered in an era of innovation the industry hasn’t seen in decades. Much of that charge has been led by some of the biggest brands in the country, most of which are franchises, such as McDonald’s, Domino’s, Burger King and Dunkin’.

Franchisees, however, want to make sure that technology generates a return. “You have to start with the business case and the return on investment," Patra said. "The first thing we start with is asking what we’re trying to solve, why we’re trying to solve it, and what is the impact to [franchisees]. We always look at tech as a building block to something bigger.”

“We share the vision with them,” Patra added. “This is the first step in the process. We can get a lot of buy-in.”

Brands can do more to help prove technology’s potential return if they operate corporate locations. Salas said Smoothie King will use the chain’s corporate locations as test beds for technology. And they’ll bring one or two franchisees along that will have a better idea of an idea’s potential. “If you get them involved in the process and they can see your successes, they’ll be your best advocate,” Salas said.

Getting franchisees on board early, in fact, is vital, several panelists said. Franchisees want to be involved and seen as partners. Do that and the buy-in process becomes that much easier. “Make them a part of the process before you even talk about technology and systems,” Patra added.

And brands have to be specific about it. Pick franchisees that are loud and influential and get them involved early. Franchisees will listen to other franchisees before they’ll listen to the brand. “It’s important to get buy-in from your most important franchisees,” said CJ Ramirez, EVP of marketing for Dog Haus.

To be sure, not everything is coming down from franchisor to franchisee. “We have a core group of franchisees who love tech and they bring it to us,” said Scott Scherer, chief information officer for the sandwich chain Jersey Mike’s. This is particularly true on potential labor-saving technology, given that franchisees have been eager to save on labor costs.

Yet technology doesn’t always fit with the brand and its standards. In those cases, brands should share the big picture with the franchisees to help them understand the reasons not to do it, Patra said.

Sometimes, brands might let franchisees experiment with new technologies themselves, perhaps with one store or with an entire market. “If you get them involved in the process, if they can see your successes, they’ll be your best advocate,” Salas said.

Franchisee demand can also bring ideas to the forefront, even against corporate resistance. A Jersey Mike’s franchisee years ago wanted to work with third-party delivery companies. The company said no. But it also let the franchisee test it. That operator came and made a big presentation on the benefits of using such companies.

Jersey Mike's then started using them nationwide, eagerly pushing into the new service. “We wouldn’t be where we are today if they didn’t do that,” Scherer said.

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