When you’re vetting franchise opportunities to find the best option for your future, you’ll look into the business model of each one. You’ll look at their products and marketing plan. You’ll talk to current franchisees and make sure you understand the franchisor-franchisee relationship.
You should also check how the franchisor uses data.
Use of big data for decision making is becoming more important all the time. Large corporations have been using this tactic for decades, but smaller companies now have access to big data that would never have been available in the past without an enterprise level budget for market data.
If the franchise you’re considering using this new opportunity, or are they giving their competitors an advantage by ignoring it?
Big data is, very simply, any data set too large to handle with an old-fashioned spreadsheet and a pencil. Companies used to use information gleaned from focus groups of 10 or 12 consumers or a survey of 100 people in a target market. Now, point of sale data can be harmonized with large-scale market research to give much larger sample sizes.
Larger sample sizes mean more accurate data. A tax preparation company can now determine how many people in a given area will value bilingual help in preparing taxes, or what proportion of potential customers in a territory will need information about Earned Income Tax Credits compared with those who will need to file a Schedule C.
A retail franchise could find out the buying habits of customers in other towns with similar demographics. It’s very helpful to be able to see when a clothing boutique should expect highs and lows during the year and what kind of seasonal items might be the exception to the rule.
Access to the business-relevant information which is now available through big data gives a company an enormous advantage, but often public access to this data is still expensive — not the way it used to be, but enough that an individual franchisee would find it prohibitive to get access through buying reports.So the first question is, “Does the franchise I’m considering capture data throughout its franchises and target markets, and do franchisees have access?”
If the proprietary POS system for your franchise doesn’t capture data, you’re missing an opportunity. Some franchises also provide social listening data about the brand and the individual franchise. If the one you’re considering doesn’t do this, you might want to check out the competition.
But remember, big data is by definition too big to handle with a spreadsheet. So just capturing the information and providing a print out isn’t really enough. Ideally, your franchise will also offer a visual or graphic representation, and a dashboard showing the data is even better if you don’t plan to have an analyst on the staff.
The tech expertise of a franchise shouldn’t be the single most important factor in your decision, but it can certainly help you narrow your list. Big tech updates by franchisors are sometimes costly for their current franchisees.