Jim Gregory
both the conditions in the field and our customers .” Graham says capturing all this data will change the way the franchisor delivers valuable marketing and performance metrics to franchisees so they can take action based on that data .
Data from the company ’ s developing FRM and POS-linked systems will give franchisees more and better information than they have ever seen before . “ They will be able to see how their store is performing on leads , conversions , expenses , profitability , and growth in quite a bit of grain and detail — trend data historically and compared to their peers . What they are going to have is great insight into their business to drive best practices ,” says Jim Gregory , CFO at American Driveline Systems .
“ We win when the franchisees win ,” he says . “ Our whole strategy is geared toward making the stores profitable . We firmly believe that is how we are going to make money and how our brand is going to grow .”
Data for expansion Terry Phillips joined Zips Dry Cleaners in 2015 as director of IT and analytics , charged with bringing together franchisee store information in a central location . At the time , the chain had 42 locations — on 42 different servers . While the data was structured identically at each location , a single report for all 42 stores did not exist . Phillips , who spent 29 years in manufacturing before joining Zips , plans to use a cloud-based system to consolidate franchisee data in a central repository by year-end , an increasingly vital task as the chain focuses on aggressive growth through large multi-unit franchisee agreements as it expands beyond its mid-Atlantic roots .
The regional chain , known for its sameday , one-low-price service , currently has 45 largely single-owned stores open and another 200 under development . In April , the brand signed an area development agreement for 110 locations in Southern California over the next 15 years , its largest deal to date .
Until the new system is in place , Phillips is sending individual store reports on customer retention , which already is reaping dividends for franchisees of the high-volume brand , where mature stores can serve as many as 15,000 customers .
“ Our chain is very consistent across the stores ,” says Phillips . “ The top 10 to 12 percent of customers on a store-by store basis spend 50 to 55 percent of the money , while the top 20 percent of customers spend 70 to 75 percent of the money . We want to show appreciation to those regular customers . We want to identify them and let them know their business is appreciated .”
Phillips says the technology will provide valuable feedback to boost both customer service and franchisee operations . “ Information is only worthwhile if it gets used ,” he says . “ Once you start that process , you will get so much feedback . Most of it is about communicating the right information that can be put to effective use .”
Data for franchisees While big data is helping franchisors help franchisees target , predict , and influence
Terry Phillips customer choices and provide better service , analytics also can ensure that brands provide franchisees with the tools they need to succeed .
Tropical Smoothie has turned to thirdparty providers to track customer service satisfaction and to reduce waste . In July , the company announced its adoption of Jolt , a paperless restaurant operations system designed to streamline cafe operations and improve hospitality and crew member training to save franchisees time and money — as well as paper . The brand also uses detailed demographic and psychographic intelligence to pinpoint prime real estate locations and avoid encroachment . Tropical Smoothie “ probably denies more locations than we approve based on encroachment of another franchisee ,” says Rotondo .
For franchisors , the task of what to do with the constantly increasing trove of data must remain centered on customer service ( both consumers and franchisees ), while investments in technology remain focused on ROI and tie in with overall marketing strategies . The ability to capture transactional , service , and social data — already plenty powerful — is only expected to gain traction and continue to grow in the world of franchising .
“ The ability to analyze and effectively use that data will be the challenge going forward ,” says Jersey Mike ’ s Hope . “ The man hours , computer hours — it ’ s a huge effort to crunch , understand , and effectively use it . While we are gathering data at a breakneck pace , we haven ’ t scratched the surface on how it is used .” ■
68 Franchiseupdate ISSUE III , 2016