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6 Steps to Success for Franchise Retail and Omnichannel

Posted by Amanda Nadile on Jun 16, 2021

Last updated on July 5th, 2021 at 03:54 pm

Franchise retail is an established, simple, and successful business model. Individual or group owners open a store (or stores) with the name, branding, trademark, and products of another company in exchange for a franchising fee and royalty payments. Corporate headquarters are in charge of the brand’s overall direction, while the franchisees handle details on the local, micro-level. 

It’s a model that’s worked for more than 100 years. With some flexibility, franchising can continue to grow even in today’s omnichannel retail world. Omnichannel requires brands to be in control of every touchpoint in the customer journey. The idea is to create a seamless experience whether the consumer is interacting with the brand online, on their phone, or in-person at one of the brand’s franchises. (Check out our omnichannel back to basics article.)

Here are six tips that can help a franchise model evolve into an omnichannel powerhouse. These are a must for corporate brands looking to ensure consistent brand experiences for every customer, everywhere. 

1. Find Common Technology Solutions

It’s not uncommon for franchisees to band together in regional co-ops to purchase supplies and services. That’s fine when it’s register rolls and janitorial products, but not for software that affects the data stream. Omnichannel survives and thrives on the back and forth flow of data to paint a full picture of customers, orders, and inventory. 

If groups of franchisees use different POS, OMS, and even ERP systems, it will be hard or near impossible for data to be available in real-time. In some cases these systems can integrate with those used by corporately-owned stores, but integrations can be expensive, time-consuming, and lead to mistakes. This is where corporate needs to emphasize to franchisees, “Let us figure out a software solution to drive our omnichannel evolution while you do what you do best.” 

2. Enable Data Transparency for Everyone

The data that drives omnichannel is generally proprietary and as closely guarded as the cash in the store’s safe. While it’s critical to protect data on all fronts, it’s also important for franchisees to know they’re part of the data process.

When decisions are made based on enterprise-wide data points, it can help everyone, including management in far-flung franchises, to make strategic decisions. For example, one franchisee might learn they need to stop selling X, and another might see they need to sell more of Y. This wouldn’t be possible without precision inventory management. When you have a complete picture of stock across all locations, you can help customers get what they want, where and when they want it. 

Of course, there’s also a benefit to seeing a complete history of what customers buy. This will help you better sell to them in the future.

3. Provide Omnichannel Guidance

The guidebook franchisees operate under should be up-to-date with all corporate omnichannel goals. Omnichannel impacts should be a part of nearly every franchise partner interaction. Customers expect everything from product and pricing to promotions and loyalty to be consistent when they shop the brand. Whether it’s a franchise retail location or not. (By the way, they likely don’t know!) 

One area to watch out for is in regional promotions. Product prices and sales should be the same throughout each store and online channel. Again, communication with your franchise partners about the impact of going off-script is essential. Especially while corporate is working hard to present a unified brand. Consumers don’t see in channels and they certainly don’t distinguish ownership. Make sure the areas at the forefront of their minds are dependable. 

4. Maintain Product Freedom

In franchise retail businesses, the franchisee is selecting items from the brand catalog to carry in their store. This helps ensure an identical brand experience for customers who visit multiple stores. But don’t forget about the local element. There is value to allowing franchisees to carry products or offer services that cater to local customers.

Franchises can complement the brand with unique in-store experiences that can’t be done online or in other locations. These may drive traffic and connect the brand to consumers not familiar with it by offering repair services, food or drink tastings, or live entertainment. 

5. Open Up Returns

In many corporate chains, product returns have become as seamless as purchases. Consumers are used to buying products online or in-store and returning them either by using free return shipping or taking them to a retail outlet. The retail brand’s order management system orchestrates the customer’s journey from shopper through to “returner” no matter where the sale originated. 

In a franchise model, returns can get “sticky.” Without a universal omnichannel platform and clearly defined policies in place, a consumer purchasing a product from one franchise region and returning to another can put a kink in reverse logistics and even financials. The product, which may be seasonal for another region, might sit in the stockroom for months before being put on a clearance table or thrown out. 

Returns are especially tricky if they are made at a location with different ownership than where the item was bought. Franchisees need to know how to adjust for these out-of-area returns. The bottom line is, there needs to be a seamless way for returns to be possible anywhere because that’s what omnichannel shoppers expect. 

6. Expand Your Omnichannel Reach

Traditional corporate retail has control of brand messaging all the way through the organization, but that doesn’t mean franchise models are at a disadvantage. They have the leg up in selling the brand in a regional area that they know well, from the people to the culture to the seasons. 

Further, corporate retail has had success recently turning their brick-and-mortar stores into mini distribution centers. This is also a formula for franchises. Franchises organically expand the brand’s footprint, making it easier for them to offer same-day delivery and buy online pickup in-store. They were designed in the brick-and-mortar era, which means franchise outlets are likely closer to consumers’ homes than distribution centers. Franchises can also partner with third-party delivery services to increase their product or order fulfillment speed. 

Conclusion

In years past, franchising was about the building of walls. Each franchisee purchased a piece of territory where they would manage sales of the corporate brand. It was very siloed. Which we know all too well doesn’t work with omnichannel retailing. 

But this doesn’t mean the franchise retail model isn’t viable or even beneficial. It absolutely is, as long as it is reshaped in some key areas. With the best of both franchises and corporate, your brand can and will thrive.

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