“Bricks-and-clicks” strategy essential for franchisees, expert stresses

Bricks-and-mortar franchisees can enhance their online presence through the use of online location-based marketing, which in turn entices customers into their stores, a franchising expert says.

Greg Nathan, founder of the Franchise Relationships Institute, says there are plenty of apps and technology platforms that enable franchisees to appeal to customers who happen to be nearby.

“[Franchisees should ask themselves,] what is our strategy around local areas?” Nathan says.

“I would be talking to other businesses in the area, if I was aware there was another franchisee doing it, and then taking ideas back to my franchisor and saying, can I try this in my store?”

“The main thing is that they don’t go off and experiment without asking the franchisor… If franchisees are allowed to run amok, it can be very confusing for the customer.”

On February 28, Nathan says the institute will hold a bricks-and-clicks forum, designed to show bricks-and-mortar franchisors how to integrate online retailing with their existing operations.

Speakers include Stephen Giles, chairman of the Franchise Council of Australia, and Robert Wong of the Australian Interactive Media Industry Association’s Retail Industry Group.

According to Nathan, many franchisors are struggling to balance the need for a strong online presence with franchisees’ concerns that an online store will undermine their local businesses.

“In the traditional retail franchising model, franchisees are usually given some exclusivity over geographical territories, but online retailing has changed the rules,” Nathan says.

Nathan says there are several ways franchisors can address the issue such as sharing a percentage of the revenue from orders placed by customers in a franchisee’s geographical area.

However, he says franchisors need to do a better job of educating their franchisees about the importance of having an online option for customers.

“Franchisors must have a credible bricks-and-clicks strategy that attempts to deliver the best of both worlds,” he says.

“However, we are finding many franchisors are in a form of denial over the extent to which this will affect the viability of their business models.”

“While some franchisors have tried to appease franchisees by having products ordered online, despatched by a local franchisee, this often ends up a debacle which frustrates the customer and damages the brand.”

Nathan says central warehousing, employing effective logistics strategies, is likely to become the most effective method in many cases.

He says while franchisees are looking to their franchisors for clarity over the company’s plans, and how these will impact their business, they can also take matters into their own hands.

In addition to location-based marketing, Nathan stresses the importance of staff training.

“There can be no tolerance of second-rate service in stores anymore… Franchisees must be far more rigorous with their staff,” he says.

“Some of the better franchisees get their staff to hand in their mobile phones [when they start work] so there is no temptation to get on Facebook. You can’t afford to miss a second.”

“Franchisees need to train their staff, particularly on how to deal with customers’ objections to prices. There needs to be a script and the staff member needs to give customers a reason.”

Nathan says measuring is also very important, encouraging franchisees to implement systems that track in-store customer behaviour.

“Monitoring these figures, and negotiating with the franchisor on how you can improve with people coming into the store, will stop you from becoming a passenger,” he says.