October 25, 2014

Franchising: The Importance Of Great Systems Within The System

franchise systems within the system

Today’s franchise business systems need to run smoothly and efficiently. Franchisees, the people who are footing the bill for the system, expect the system to work. They also expect (because of what they were told while they were investigating the franchise) the “systems within the system” to work.

When things don’t work…things that affect revenues and profits, for instance, frustration ensues.

For example, let’s say that you’re the owner of a retail franchise. There are two things that are crucial for your business to operate, and both of them have to do with collecting revenue.

1. Credit Card Processing Machine

When customers purchase one of your products, they can pay by cash, check or credit card. These days, almost one out of every three purchases is made with a credit card, according to Visa.

If you own a retail or food-service franchise, customers expect to be able to pay by credit card. These transactions have to go through a credit card processing machine. There are 4 entities involved whenever a credit card transaction takes place. They are:

  • The merchant (you) receiving the payment
  • The merchant’s bank
  • The bank that issued the actual credit card
  • The customer

As a franchise owner, you can only control what’s in front of you. When you accept credit cards, it’s crucial for you to have high-quality credit card processing equipment and technology at your disposal. To that end, ask your franchise sales representative about the reliability of the equipment franchisees are using to do credit card transactions.

Better yet, ask several franchisees. They’re in the game every day.

When your franchise business is jammed with customers paying by credit card, your credit card processing equipment needs to work perfectly. Today’s customers are an impatient bunch. Don’t expect them to wait around very long if there’s an issue with your machine and they’re unable to pay. They’ll leave and buy what they wanted from you – elsewhere.

2. Point of Sale (POS) System

In a retail or restaurant environment, the point of sale system is the most important piece of equipment in use today. An article I found on Wikipedia sums up why POS systems are so important:

“The POS systems in various retail industries use customized hardware and software as per their requirements. Retailers may utilize weighing scales, scanners, electronic and manual cash registers, EFTPOS terminals, touch screens and any other wide variety of hardware and software available for use with POS systems.”

A lot of today’s POS systems feature things like:

  • Inventory management modules
  • Financial information-transactions
  • CRM
  • Gift card handling
  • Coupon validation
  • Customer tracking

A good deal of customization can be added to POS systems. Almost any feature imaginable can be created and added. Some POS systems even have credit card processing integrated within the system for maximum efficiency.

Franchise Systems Within the System

A couple of other “systems within the system” are needed by franchisees and franchisors to keep things running smoothly. Things such as:

Payroll

One of the most common questions posed to me by would-be franchise owners has to do with payroll:

“Joel, I’ve never managed payroll before. If I end up buying a franchise that requires a lot of employees, does the franchisor teach me how to manage it?”

It’s a great question-with a great answer. Some franchisors provide payroll software as part of the computer package you receive as a franchisee. If that’s the case, they’ll also provide in-depth training on how to use it.

Even if the franchisor doesn’t include a payroll software package, they’re readily available from vendors like Intuit, Paychex, and ADP. There’s even a payroll card available now.

Internet Marketing

Internet marketing-done right is crucial to the success of both franchisors and franchisees these days. Internet marketing is a moving target. It entails a lot of things, including search engine optimization (SEO) pay-per-click advertising (PPC) and social media marketing. It’s becoming more difficult for in-house marketing personnel at franchise headquarters to keep up with everything, including all of the changes that search engines like Google and Bing seem to be fond of making as of late.

That’s why it’s important for franchisors to use Internet marketing specialists. They are tuned into each and every change that search engines make, so they can help their clients rank better for keywords used by their prospective clients, customers and franchisees.

Companies like Empowerkit help franchisors and franchisees with their Internet marketing needs by first creating then managing engaging websites. Once the sites are set-up, the company can help produce fresh content and get potential customers engaged through the use of SEO and social media marketing.

Other companies that specialize in Internet marketing for franchisors and franchisees include ElementsLocal, Greenbaum Marketing, and Stark Logic.

Ask Questions About The Systems

If you’re considering franchise ownership, I’m going to assume that one of the major reasons you’re interested in a franchise is because of the system. It’s what you’re buying when you buy a franchise. You’re buying a way to get a business up and running with minimal headaches.

The franchise business system has worked for years.  It’s an amazing system. If you decide that it’s for you, make sure you find out how well the systems within the system work.

Systems Concept Photo via Shutterstock

9 Comments ▼

Joel Libava - Franchise Expert


Joel Libava Joel Libava is the Franchise Expert for Small Business Trends. Joel, The Franchise King®, equips today’s prospective franchise owners with time-tested, proven techniques designed to increase odds of success. He does this through one-on-one coaching, and gobs of useful content that can be found on places like Small Business Trends, SBA.Gov, and his award-winning franchise blog, The Franchise King Blog . He’s been featured in Entrepreneur® magazine, and is frequently called upon by national media outlets and publications for his no-spin insights into the world of franchising.

9 Reactions

  1. I’ve worked with several franchises doing PPC advertising and am working with one currently. Targeting the correct geographic area is a big part as well as having a website the clearly features the desired action and measures your success rates on getting users to take the desired action.

  2. Joel,

    A very useful post. One of the strengths of franchising is the accessibility to systems within the system.

    If I’m allowed to add, I’d say on-boarding training system will make a huge difference in franchising. As staffs are coming and going, we need software which can help new staffs to get on-board quickly – in retailing, this is very helpful.

  3. Internet marketing-done right is crucial to the success of both franchisors and franchisees these days. The reach is global and borderless.

  4. It is true that the system can make or break the franchise. This is why I always go with the big brands when it comes to franchising – their systems are more ingrained, more solid. Others are still a gamble.

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