Automation is making quite a buzz in recent years across industries including franchising and rightly so. According to a report by Franchise Direct in 2020, technology has been playing a significant role in boosting franchise sales. Automation has made it easier for franchisors to manage operations, streamline processes, and enhance customer experiences. With automation, franchisors can gather data on customer preferences, purchase history, and behavior to provide personalized experiences that lead to customer loyalty and repeat business.

Research by McKinsey in 2019 has shown that franchises that invest in technology have a higher chance of success. In their study, they found that "franchises that leverage technology and have taken a comprehensive approach to their transformation have generated 50% more value compared to those that don't". This suggests that automation can have a significant impact on the success of franchise businesses. Moreover, automation can also improve customer experiences, leading to higher sales. 

A report by Deloitte states that "automation and artificial intelligence (AI) can improve customer experiences by enabling personalization, providing recommendations, and streamlining processes. A significant majority of the respondents (94%) believed that the implementation of Artificial Intelligence (AI) is essential for achieving success in today's business landscape" (Deloitte, 2022). 

One of the most significant advantages of automation is the ability to manage franchises remotely. With the COVID-19 pandemic causing widespread disruptions to the franchise industry, franchisors had to find new ways of managing their operations. Automation and technology adoption allowed franchisors to manage their operations remotely, ensuring business continuity even during the pandemic. This has highlighted the critical role of automation in the franchise industry and has accelerated the adoption of technology in the industry.

Decoding automation and it’s benefits

Automation technology is designed to automate various processes within a franchised business model. It can be used to streamline customer service, manage sales pipelines, and even generate custom reports on customer engagement or store performance. By leveraging an automation technology platform, you can drastically improve the efficiency of your operations while also reducing costs associated with manual labor or services. 

Benefits Of Automation Technology

• Increased efficiency and productivity

Automation can help save time on mundane tasks, freeing up valuable resources to focus on activities that contribute to growth. Automation doesn't just make your processes easier, it also helps you become more efficient and productive - leading to better customer service and higher customer satisfaction ratings. In addition, automation of various marketing tasks such as email campaigns, social media campaigns, etc., can help generate leads for your franchise business faster.

• Reduced overhead costs

By automating manual processes in your franchise business, you can reduce the need for additional staff and materials - resulting in lower overhead costs over time. Additionally, as automated processes require less human oversight, they also help ensure accuracy and consistency throughout all areas of your business operations – from marketing to customer service.

• Streamlined operations

Automation can help streamline tasks such as managing inventory, scheduling appointments, and tracking shipments - which would otherwise take up hours of manual labor each day. Franchisors can automate day to day operational processes, such as inventory management, accounting, and payroll significantly reducing errors, improving the overall accuracy, reducing the workload, and  focus on other critical aspects of their business. This will free up more resources to focus on core operations within the business, leading to improved performance overall. This can lead to increased efficiency, improved productivity, and ultimately, higher profits.

• Boost efficiency

Automation can help boost efficiency by providing access to data analysis tools that enable franchisors to gain deep insights into the impact of their marketing efforts on sales.  By using data analytics, franchisors can gain insights into customer behavior, preferences, and trends and tailor their products and services to meet the needs of their customers, increasing customer satisfaction and loyalty. Data analysis can also help franchisors identify areas where they can improve their operations, such as reducing wait times, improving delivery times, or optimizing the supply chain.

• Improved customer relationships

Automation and AI can also help improve the customer experience by providing personalization and recommendations. By gathering data on customer behavior and preferences, franchisors can provide personalized recommendations, improving the customer experience and driving sales.  Automation helps keep customers informed about new products or services offered by your franchise business and allows them to easily engage with the brand at any time of day or night without having to manually contact customer service representatives each time they have an issue or question. 

Additionally, chatbots and virtual assistants can help customers with their queries and provide assistance, even outside of business hours. This level of service and convenience can lead to increased customer loyalty and higher franchise sales. Moreover, automated customer service tools like chatbots are a great way to offer personalized attention while reducing the strain on human customer service agents.

• Increased franchise opportunity

By implementing automation, franchisors can gather data on customer preferences, purchasing habits, and behaviors, which allows them to provide personalized experiences that increase customer loyalty and retention. Automation and artificial intelligence (AI) can improve customer experiences by enabling personalization, providing recommendations, and streamlining processes. Which, in turn, leads to higher sales and revenue for franchises.

As an added bonus, automation can help make franchising more accessible for potential buyers since it eliminates some of the most tedious parts associated with starting a business from scratch (e.g., creating product lines). Franchises that utilize automation are more appealing since they don’t require extensive training for new owners before they start operating their own locations – making it easier for them to jump right into running their businesses without too much stress or hassle.

Case Study

In 2018, McDonald's acquired a company called Dynamic Yield, which provides personalized digital menu displays that can be customized based on factors such as time of day, weather, and customer order history. These displays use artificial intelligence (AI) and machine learning algorithms to suggest menu items based on the customer's preferences and purchase history, making the ordering process more efficient and personalized. McDonald's also implemented other automation technologies such as self-order kiosks, mobile ordering, and automated fryers and beverage dispensers. 

By using Dynamic Yield's personalized menu displays, McDonald's has been able to suggest menu items tailored to each customer's preferences and purchase history, leading to increased upselling and cross-selling opportunities. This has also helped drive customer loyalty, as customers feel more connected to the brand and its offerings. 

Another key benefit of implementing automation technology has been improved operational efficiency. By using self-order kiosks, mobile ordering, and other technologies, McDonald's has been able to process orders more quickly and accurately, leading to shorter wait times and increased customer satisfaction. This has helped drive more foot traffic to McDonald's restaurants, ultimately leading to higher sales and revenue.

Overall, McDonald's investment in automation technology has helped the company improve its operations, drive higher sales and revenue, and maintain its competitive edge in the fast-food industry.

Bottomline

Automation has become essential in the franchise industry, enabling franchisors to operate more efficiently and enhance customer experiences. As shown by research and reports, franchises that invest in technology have a higher chance of success, making automation a critical factor in boosting franchise sales.

Automation can have an enormous impact on your bottom line by streamlining operations and reducing costs while also helping you gain greater insight into customer engagement through data analysis tools so that you can optimize your strategy for maximum growth potential.