Special Edition: Technology Fuels Franchise Growth

Beyond the unmistakable impact of the Internet and World Wide Web, advances in technologies used every day by franchisees are continuing to change the face of franchising -- and the way franchisees do business.

Many of these technologies are converging, or already integrated: point-of-sale (POS) systems; digital video surveillance; web-based applications; telephony and communications; customer relationship management (CRM); lead generation; employee recruitment, hiring, and training; and more.

One franchisor, Purosystems, is using a VOIP (voice over Internet protocol) system that allows corporate sales managers to listen in live on a sales call and provide information and suggestions only the salesperson can hear. "You can resolve any number of issues, and get to alternative solutions in real time," says Keith Gerson, PuroSystems' president and chief operating officer. And it all ties in neatly to the company's customer relations management system. "You can capture the call and plug it into our GoldMine database, assigned to a specific prospect."

Franchisees also are using advanced email and customer relations management software for promotional campaigns and special offers, and to send their customers reminders about scheduled service calls - saving the cost of printing and mailing, and freeing staff from tedious phone calling.

Even employee recruitment has gone digital. Mike Scanlon, 53, an Applebee's franchisee since 1988, relies on his 20- and 30-something staff to get the message out to Millennial-aged job prospects. His company has produced a YouTube video that he says has been highly effective in attracting the young employees he needs in his restaurants. "Ninety percent of our employees communicate on YouTube and MySpace and similar social networks. We want to be where our employees are," he says.

And if you can't, digital video surveillance systems can take you there. Scott Waters, a KFC and Taco Bell franchisee in New York City and Long Island, installed one of these systems about three years ago after an armed robbery at one of his KFCs. "It became, for me, not only an issue of security, but employee safety," he says. Waters carries a laptop to view the restaurants any time he wants, and his security company randomly monitors his stores for him. Everything is recorded and stored digitally. These systems have been used to thwart slip-and-fall scammers - as well to as monitor employees not only for misbehavior and theft, but also to recognize them for superior customer service.

For employees on the move, GPS technology allows franchise owners whose business relies on mobility to minimize the number of miles their vehicles travel, reducing fuel and maintenance costs. These concepts, primarily in the service sector, include deliveries (from flowers to food to office supplies), maid services, handyman services, computer repair, home healthcare, and mobile dog grooming.

Vehicle Tracking Solutions (itself a franchise) sells, installs, and services real-time GPS tracking systems that allow fleet owners to increase productivity and boost profits by tracking movement, monitoring speed, and providing historical reports on all vehicle use.

Another franchisor, 4Refuel, based in Canada, is cashing in not only on the rising cost of fuel, but on the "green" movement as well: in 2007 the company helped its clients save $20 million (Canadian) in refueling costs and eliminate 17.5 million kilograms of greenhouse gases. Franchisor Tim Hortons (known stateside as the Canadian Dunkin' Donuts) has been a client since 2001. And both are expanding into the U.S.

Site selection, too, has been made easier and more accurate through computer-based solutions that integrate GPS, demographic databases, and local market research.

On the training side, franchisees have long used computer-based training (CBT) to reduce costs and ensure quality. These virtual classes, whether online or on DVDs, help ensure that their managers and employees stay up to date on training, techniques, promotions, operations, news, and other developments related to growing their business.

Regis Corp., the world's largest hair salon company with $2.7 billion in annual sales, spends $16 million a year on education and training for its nearly 12,000 salons worldwide. In 2003, Regis introduced a DVD program for training and continuing education. "We were one of the first, if not the first, in the industry to implement DVDs into our education process," says Melanie Ash Peterson, senior artistic director for Supercuts (one of Regis's many brands).

Behind the scenes, franchisees are saving money by using technology to reduce energy costs. Hotels and motels have been especially eager to embrace energy-saving light bulbs, high-efficiency heating and cooling systems, and new technologies that reduce the cost of washing their linens and towels - all significant expenses in the lodging industry.

Technology advances have also allowed the development of completely new franchise concepts, unimaginable just a few years ago. Two examples: DNA Services of America provides paternity and other family relationship tests, forensic DNA, DNA safeguarding and banking, DNA detection services, and infidelity tests; and AccuDiagnostics offers drug, alcohol, steroid, and DNA testing and consulting services to businesses, schools, government agencies, and private citizens.

When you think "high-tech," the usual categories include computer maintenance and repair, security systems, ink cartridge refilling, telecommunications, digital video, web hosting, video games, accounting and tax services, shipping and logistics, printing, and signs. What might not spring immediately to mind are franchises involved in such everyday activities as lawn maintenance, dry cleaning, carpet cleaning, painting, and maid services.

Martinizing Dry Cleaning, today a household name, was started in 1949 by a chemist who introduced the idea of on-premise dry cleaning using a newly developed, nonflammable chemical. More recent examples include Spring-Green Lawn Care, which offers an "organic" lawn care option. And ChemDry touts its "Drier. Cleaner. Healthier" carpet cleaning technology. Maid services, too, are going green and healthy in the cleaning products they use.

So whether it's "mundane," everyday use of technology like POS systems that report every transaction in real time to the owner, or the inclusion of the latest scientific developments to found entirely new concepts, technology and franchising continue to advance hand in hand.