Why Franchisors Implement a Uniform Point of Sale System

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By F. Georges Sayegh

Why Franchisors Implement a Uniform Point of Sale System

F. Georges Sayegh, A.S.D, C.ADM, FCMC of Quebec and Ontario, is a consultant in franchise and technology transfer and author of 18 books on franchising and associated businesses. To reach him: gsayegh@gsayegh.com; Tel.: (514) 216-8458.

 

 

 

Traditionally, franchisors received reports from their franchisees declaring their income, their contributions to the national or regional advertising fund, and their royalties. The process was cumbersome for both franchisees and franchisor because, on one hand, the franchisee had to compile the information from cash register tapes declaring product or service sales by product line, and the franchisor had to compile the information received in the accounting system. In addition, the franchisor had to provide franchisees with a statistical report on their performance compared to other members of the network.

Nowadays, franchisors are increasingly opting to standardize their systems by implementing Point-of-sale (POS) systems in all their corporate stores as well as their franchises. This method allows them to monitor the operations of their franchisees on a daily basis while at the same time:

  • Simplifying daily operations;

  • Ensuring integrated information;

  • Reviewing all in-store, online and delivery orders;

  • Integrating accounting and marketing programs;

  • Establishing key performance indicators (overview dashboard);

  • Ensuring better personnel planning;

  • Facilitating e-commerce purchases and sales;

  • Facilitating foreign currency transactions;

  • Improving cash management.

On another note, modern franchisors ensure better supervision by:

  • Planning training courses adapted to their franchisees thus minimizing time spent completing obsolete reports;

  • Freeing up valuable time enabling franchisees to spend more time managing their operations;

  • Establishing a process of standardization of network information technologies.

 

When a franchisor makes the decision to standardize systems by introducing Point-of-sale (POS) systems, he wishes to ensure that such a system provides both franchisor and franchisees an undeniable advantage over all management layers, including:

At the franchisee level, it ensures a:

  • Better inventory management;

  • Simplified invoicing;

  • Speed of payments;

  • Better management of customer orders;

  • Better supply management;

  • Better management of orders with suppliers accredited by the franchisor;

  • Improved customer experience;

  • Greater cost reduction;

  • Higher customer satisfaction and loyalty;

  • Better personnel management;

  • Facilitated compilation of staff payroll systems;

  • Better personalization of customer purchases.

 

At the franchisor level, it ensures a:

  • Better planning of advertising and promotional campaigns;

  • Better corporate image planning;

  • Construction of great corporate culture;

  • Development of coherent brand management (Branding);

  • Increased efficiency in management of wholly owned (corporate) stores and franchises;

  • Multi-store or restaurant operations;

  • Acceleration of required data and reports;

  • Monitored information;

  • Regularly updated network information;

  • Information security;

  • 24/7 access to data

  • Simplification of operations;

  • Reduced transcription errors of figures;

  • Increased income;

  • Profit center accounting;

  • Technical and technological support.

 

In addition, with all the constraints caused by stock shortages from supply sources, thanks to universal technology, franchisors have more time available to analyze inventories in real time, thus ensuring that their network has stock on time or does not run out of products. Additionally, it provides franchisor managers with the flexibility to identify top-selling items and identify suppliers who can provide for the network in a timely manner.

In addition, by standardizing information management systems connected to Point of Sale (POS) systems, franchisor managers can access key franchisee figures to analyze sales by product line and see historical trends such as inventory variations, allowing them to plan advertising campaigns in a timely manner.

On another note, Point-of-sale (POS) systems allow franchisees to better plan their staffing resources, ensuring that the cost of labour is profitable.

In addition to streamlining day-to-day operations, many Point-of-sale (POS) systems also offer loyalty initiatives. Point of Sale features offer franchisees the ability to improve external communication by storing consumer email addresses. To build brand loyalty and drive repeat visits, franchisors can send email newsletters locally and nationally, customizing them to customers' specific purchase history. Collection solutions also promote franchisee loyalty.

The sooner a franchisor implements a universal system that combines point-of-sale and management technologies, the sooner they can improve reporting accuracy and free up time for other tasks. Having a universal system allows franchisors to calculate royalties in real time and identify discrepancies as they arise.

In conclusion, universal technology can radically transform the network of wholly owned (corporate) stores and franchises into an operational powerhouse by providing the necessary tools for both franchisees and franchisors to improve their day-to-day management, despite the cost of upgrading to this system.