Franchise IT: Trying To Not Knock Over The House Of Cards

Franchisee Columnist Todd Michaud has spent the last 16 years trying to fight IT issues, with the last six years focused on franchisee IT issues. He is currently responsible for IT at Focus Brands (Cinnabon, Carvel, Schlotzsky's and Moe's Southwestern Grill).

Implementing retail technology in a franchise environment can be like building a house of cards. Each franchisee is likely to be slightly different than the next or have a slightly different requirement or slightly different existing technology. Although each these variances may be small and seemingly unimportant when viewed alone, the more variances there are--and the longer they remain outside the standard--the more unstable the foundation of the "house" becomes.

To make things more challenging, the person who had the implementation role before you could have stacked the deck against you. It is much easier to say "yes" to a request for something different than it is to say "no." In most cases, these requests will genuinely move the business in the right direction. But that's a double whammy: It means your predecessor may have created a field of variance landmines that you must painfully discover on your own.

Let me use an example from my own world to help describe this challenge. I have been tasked to work with my operations partners to deploy a new credit- and gift-card program to one of our brands. We have negotiated a contract at the FOCUS Brands level that will provide cost savings to each franchisee over its existing plan. The brand currently uses three payment application platforms on three different platforms, each representing a different stage in the brand's history (the franchisee purchased whatever was approved at the time).

The goal is to convert roughly 300 locations to the new platform in just over three months. Although this task seems fairly straightforward, unfortunately, it is not. Until we got into the details, we did not see the variances that make this project a real challenge:

  • Of the roughly 150 locations on the most recent platform, we discovered that 100 purchased their systems from the manufacturer (per the Brand Program) and 50 purchased their equipment through a reseller/dealer.
  • Of the roughly 150 locations on the most recent platform, many are using only the manufacturer's software rather than both it and the hardware platform. Their hardware has come from unknown sources (other restaurants, eBay, etc.). This variance has become important, because we discovered some of that hardware does not have the capacity to run the software required for the new program.
  • Some of the locations have taken the initiative and integrated their credit- and/or gift-card processing into their POS on one of the non-approved platforms.
  • Some locations are current on their hardware and software maintenance while others are not. This variance means the new upgrades could cost anywhere from nothing to several thousand dollars, depending on the state of the franchisee's system and its current provider relationship.

The list goes on and on. Each of these variances was likely a decision made with the best of intentions at the time. Why wouldn't you want a franchisee to save money purchasing its system or speed up its operations by integrating its credit-card processing? Now that it is time to deploy a new national program, however, these variances are huge obstacles to overcome.The tendency when approached with these types of situations is to work around the issues rather than address them. But that approach just makes the problem worse. And yet, that is what happens most often. When faced with a choice between a few hundred dollars in memory and possibly tens of thousands of dollars for a new system, I bet you can guess on which option most will choose.

"Now Todd, you don't really expect a franchisee to spend $30,000 to implement a new credit- and gift-card program, do you?"

"No, but I do think the franchisee has been living on borrowed time since the decision was made to purchase in the non-standard platform in the first place. It may have saved $10,000 when it purchased the system, but the franchisee took a risk that it would not be able to support future programs like this."

"Yeah, well, nice speech. But the fact remains that the franchisee is not going to buy a new POS just to support this program. Figure something out."

I am not complaining about the situation. Nor am I naive enough to think that the way business gets done will change any time soon. Sure, sometimes I wish IT projects worked more furniture from IKEA. When you buy that funky looking recliner from Scandinavia, all the parts come in an efficient package and include all the tools you are going to need in addition to step-by-step instructions for re-creating an exact duplicate to the one you sat on in the showroom. But I have yet to encounter such a project.

Instead, a successful IT leader must be part furniture builder, part designer, and part shipping and receiving expert. I believe that the key to success in this environment of variances is to manage these projects at the absolute lowest level of detail.

My team on this card- and gift-card program actually got caught managing project at too high of a level and recently had to reset its workplan because many details were being overlooked. But the team identified this problem and immediately started working at a much lower level of detail.

The key to building a house of cards is to take your time with each and every card. It is also important to evaluate each and every request for a variance with a keen eye to the future. You need to understand how much technical debt you are assuming with each variance decision and make those choices with your eyes wide open. Track each variance in a way that allows future project teams to have a more complete view into the configuration of the system so the next project will be better equipped to handle the situation.

What do you think? Leave a comment, or E-mail me at [email protected]. You can also follow me on Twitter: @todd_michaud.

Term Of The Week: "Vacation": A time that requires you to work more than your normal week. "I can't wait to get back to a normal workload after that week on vacation."

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