New Technology Can Mean Change for Best Franchises

The franchisor-franchisee relationship rests on mutual trust. This trust, however, can be tested when the franchisor tries to implement changes in the business pattern. It may be a new technological innovation or a state-of-the-art product, but either way, the franchisor may run into resistance, even if he’s trying to do right by his franchise opportunity. So, if you are a franchisor thinking of introducing some modifications in the running of the business, here are some pointers to minimize the potential problems as much as possible.

• Do a detailed study of the present scenario: Before introducing a new technology or product, carry out detailed surveys of what is happening in all your franchised units. Are most of them losing out because they have outdated transaction systems? Then it’s quite possible that they won’t mind upgrading to new facilities that will save them considerable amounts of time and money. Also, check the cost of implementing the new changes. If they cost too much and don’t bring immediate results, then the franchisees may be reluctant to go for them.

• Confide in your franchisees: Remember that your franchisees are part of the family, and must have some say in the running of the business. After all, they will be paying for the new innovations and running them as well. If you take the position of patriarch, then you will end up with a bunch of disgruntled franchisees. They may even take you to court. So, to keep them on your side, show them the profitability of the change. Annual meetings where most franchisees are present are a good place to introduce new technologies and products.

• Try to sponsor a part of the cost: The reason franchisees shy away from changes is that these changes cost some amount of money. If possible, subsidize a portion of those costs to instill confidence.

• Don’t force the new innovations on the franchisees: One of the major complaints that franchisees have against their franchisors is that they have been forced to implement a costly change. Many of them are small-time businessmen with single stores. Hence, never assume that your franchisees will jump to upgrade, just because you have told them to. Always talk to them first and never make a unilateral decision. Moreover, try to keep things as simple as possible, and check whether the employee training programs are hampering the productivity of the franchisees.

• Find a guinea pig: Franchisees, especially single-store owners, are notoriously out-of-sync with the latest technological innovations or products. They are more focused on business. Consider, then, finding one or two franchisees who would be willing to implement the changes and introduce the innovations in their stores on a trial basis. If the franchisees learn that one of them is using something new and profiting from it, they will have no problem in implementing that change in their stores as well. Fellow franchisees sometimes become better spokespersons for the new technology/product than the franchisor himself!

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