When I worked as a multi-unit franchisee and area developer for PostNet, I helped push for the adoption of a standardized accounting system for the entire franchise network. As a franchise system in 2007, this concept was generally way ahead of the technology curve for that time. Corporate embraced this idea and soon made Quickbooks Online the required accounting platform for all franchisees. The universal adoption of Quickbooks allowed the system to develop better accounting benchmarks and support franchisees who were focused on profitability – today, both common goals for franchise systems. I know it helped my franchise units, as well as the system overall – ALL GOOD.
Fast forward to 2015, and cloud-based systems are being used more and more in the franchise universe – especially in new, emerging brands. These brands recognize the advantages of a cloud-based system and see it as a strategic advantage when attracting new franchisees – the majority of whom are much more interested in building a brand than managing the accounting and other administrative functions of the business.
Other advantages of using a cloud-based system include:
- The peace of mind that your data is stored securely instead of on a hard drive that is bound to crash eventually.
- No more updates to load and manage version compatibility.
- The convenience of accessing financial reports and other data from any computer or mobile device. With a cloud-based system, corporate can see data and run a comparison analysis of revenue, sales mix, margin analysis and other performance indicators so that franchisees are able to make improvements and enhance their overall profitability. Also, your accounting or bookkeeping person can easily access the information without worrying about outdated information or duplication errors.
- The flexibility for franchisees, especially multi-unit owners, to track their own benchmarks for success – whether or not they are used by corporate. Instead, these figures can be isolated and used for store owners without affecting corporate’s analysis. Today, there are also “bolt-on” reporting systems that can create an automatic analysis for your business – quickly and easily. This makes the data USEFUL for making decisions.
- Consistency across the franchise so data is easier to compare. It also provides useful benchmarks so corporate can see trends and offer franchisees specific business suggestions for profit improvements – that’s the BOTTOM LINE.
I’m seeing this trend firsthand in my work with the Franchise Services Group at RBZ Accounting Firm, based in Los Angeles, which is helping to make cloud-based systems a reality for franchise systems with the Xero.com (among others they offer) accounting platform. It’s a platform I switched to recently myself, as I found the simple, uncomplicated design ideal for my business model – which doesn’t need much of the higher-level accounting functions of QuickBooks. I pay for what I need and use, so it’s less expensive, easier to use and more effective for my needs.
Whether it’s accounting, marketing, or training systems, technology companies and consulting groups such as RBZ are bringing cloud-based services to the franchise universe and people are getting excited about it, and seeing the VALUE – both practical and strategic. And while these systems are much easier to implement in newer and smaller franchise companies, I do project this technology will be found in most serious franchises within the next five years – particularly if they want to attract the attention of younger, tech-savvy franchisees who have come to rely on, and expect, the convenience and security of these cloud-based systems.
John Francis is a consultant, strategic advisor and keynote speaker who helps franchise organizations “see what they don’t see” and achieve their highest levels of success. In his 25+ year career, John has worked as a franchisee, franchisor, investor and Board Member for brands and organizations such as Cost Cutters, PostNet, Sport Clips, Office Pride and the International Franchise Association (IFA). To learn more about John, visit www.johnwfrancis.com.
Copyright © 2015 by John Francis. All rights reserved