Franchises impact the global economy. In a report that was issued before the COVID-19 pandemic, the World Franchise Council Survey released a report showing franchised businesses account for over 19 million jobs and produce more than $1.75 trillion yearly total revenue. France, the world leader in franchise contribution to GDP, attributes almost 12% of GDP to franchise sales.
In the Franconnect report, State of Franchising 2021, 79% of US franchisors shared their plans to expand. And of those opening new locations, 11% plan to open 25+ units. They also predict record-breaking sales in 2021 if COVID-19 is contained.
Franchises already rely on technology tools such as franchise management software, POS systems, and digital marketing. Increasingly, digital commerce systems are a must-have for franchising, too.
Millennials and Franchising
Digitally native millennials take on managerial and decision-making roles and look for convenience, ease, and self-service in purchasing. Millennials make almost three-quarters of all B2B purchase decisions and are often the sole decision-maker.
Enterprising millennials value the freedom of being their own boss and are a hot target audience for franchise operators.
The International Franchise Association promotes millennials as perfect franchise owners for many reasons. Millennials:
- Think outside the box and can help modernize brands.
- Understand risks and reject traditional work for entrepreneurship.
- Want to change the world and are quick to ditch unfulfilling jobs for business ventures that make a difference.
- Are digitally savvy and understand modern marketing methods.
- Love learning and appreciate mentoring and good leadership.
As millennials move into franchising, they want eCommerce to improve operations, scale their business, and support an omnichannel experience.
eCommerce Strengthens Franchise Relationships
Franchisors and franchisees need eCommerce tools to communicate effectively, stay productive, and reach mutual goals. These are key to mutual profitability and maintaining a strong relationship.
eCommerce is perfect for streamlining franchisee procurement. Franchisors provide franchisees with 24/7 access to the supply chain for more efficient operations.
Also, eCommerce enables franchisees to bring products and services to the market online. By controlling the eCommerce experience, franchisors ensure compliance in highly regulated industries such as healthcare and alcoholic beverages, thus removing a source of friction in the franchisor/franchisee relationship while still supporting franchisee growth.
A B2B-focused eCommerce platform strengthens franchise relationships and removes conflict. Unlike B2C eCommerce, a B2B system supports omnichannel selling, multiple sales channels, price lists, and localization. By centralizing order management for franchisors and streamlining franchisee buying journeys, both franchisor and franchisee get more value from their relationship.
Features That Support Franchises
A B2B eCommerce platform should offer features that support franchisor and franchisee success.
Once franchisees relied on catalogs, phones, or fax to order from the franchisor. Modern franchisees want to go online to make their purchases, check order status, and handle returns.
Smooth self-serve experiences translate into more efficient franchisee operations. This frees franchisees to focus on delivering a better experience to their customers.
Franchisee portals should offer:
- quick ordering, CSV upload, and easy reordering
- mobile accessibility
- search by product name, attribute, or SKU
- multiple shipping and payment methods
- personalized prices, promotions, and product catalogs
Organizational structures and account roles
Franchise eCommerce platform must support the franchisor and franchisee hierarchies. Franchisors need to control franchisee access and permissions, from the website displayed to customized products, prices, and payment terms. Franchisees need to manage their employee access and permissions as well.
Franchisors generally control the supply chain, specifying products and services the franchisee must use.
In this instance, the B2B eCommerce solution must operate as a marketplace and support third-party vendors. The eCommerce system displays suppliers to franchisees based on their account, business unit, or location.
Vendors control their product listings and franchisors control vendor activity to ensure compliance with supplier agreements.
Localization and scalability
Franchises may span different regions and many franchisors offer protected territories. In this scenario, the eCommerce system must support personalized location-specific websites, landing pages, and customer portals.
Localization capabilities allow franchisors to support each local business according to their agreement. Each local unit offers its customers the proper product catalog, pricing, and taxes in addition to displaying the language and currency of the location.
Franchisors maintain visibility into the entire organization and ensure a consistent customer experience across the network, helping accelerate growth.
Because most franchisors control the supply chain, ERPs and WHMs should synchronize inventory data with the eCommerce portal in real-time. You may also need integration for product information management, eProcurement, and payment gateways.
Since every franchise network is different, integration varies by use case and application. For example, real-time API integration with the ERP may maintain accurate inventory numbers while a scheduled SFTP data sync is used for invoicing. The more integration methods supported, the better the platform can accommodate franchise network growth.
Purchase paths, including approvals and checkouts, can vary by franchisee so automated workflows should be customizable.
In addition, if franchisees are engaged in direct eCommerce, franchisors may need a pricing algorithm to control pricing. For example, prices for one franchisee may reflect unique, local market issues while the cost of delivering raw materials could warrant different pricing to another.
Automation can also handle requests for quotes, send notifications, and much more.
Franchising with eCommerce in Action
One France-based beverage franchise with over 220 locations offers beer and wine sales online, in person, and even on-premise. With multiple sales channels and over 3,000 products, franchisee procurement was a hassle.
Before the franchisor created an integrated system, each franchisee manually ordered inventory through different websites. The franchisor needed to make ordering more efficient and gain end-to-end visibility into their B2B2C business. They realized that not only could a B2B eCommerce platform centralize ordering, but the same technology could offer an omnichannel shopping experience to retail customers.
With integration and automation, stock levels are synced with the ERP and PIM, and ordering is easier and almost error-free. B2B2C eCommerce provides greater visibility into product popularity, stock levels, and fulfillment operations.
The entire franchise network enjoys improved ordering and customers get an online shopping experience that supports their local business. Everyone benefits from franchise eCommerce.