Ultimate Communication Tool: How Franchise Use Of The Intranet Is Growing & Evolving

by Kerry Pipes

The popularity of Intranet systems for communications within franchise organizations continues to blossom almost as quickly as the information it passes along. That fast, efficient and private transfer of information remains one of the most popular benefits of the technology among franchise organizations worldwide.

More and more franchises are chucking the printed communication pieces of the past in favor of digitally displaying messages and materials on their Intranets. Unanswered phone calls and stacked up voicemails are continuing to be replaced by open forum discussions online between owners and operators throughout the entire franchise system. And franchise executives are responding directly to e-mails and unique forum posts from franchise operators. The inclusion of third-party vendors is another growing area on the horizon of franchise Intranet use.

As with every technology-based operations-enhancing tool, evolution comes fast. So what is the state of the Intranet at the end of 2001?

How It's Being Used

Dan Martin is president and CEO of San Diego, Calif.-based IFX Online, a company specializing in Internet-based tools and solutions for the franchise industry. Martin has a finger on the pulse of Intranet technology and use within the franchise community and he's made some interesting observations.

"Online bulletin boards have been around for a little while, but their popularity is on the increase," begins Martin. A myriad of topic-specific forums and bulletin boards are appearing covering all kinds of subjects related to running an efficient business. For example, "Product exchange boards are becoming popular. Franchise operators can post 'I need', or "I've got",or "who's got?", messages for excess products and supplies, and then make beneficial exchanges with others in the system," explains Martin.

In fact, that's just what MGW Group, which operates Cookies By Design and Cookie Bouquet out of its Plano, Texas, office is doing. "We have used our Intranet not only to allow our franchisees to interact, but also to allow our operators to exchange extra goods and materials with each other or to even go in together to buy supplies," says Phil Shunk, director of information technology.

There are other developments Martin is beginning to notice. Not only are more and more franchises putting up their marketing and advertising materials on their Intranet sites for franchisees to view, customize and download, but they're getting quick feedback on the materials from the franchisees and can then expedite quick and effective changes related to those materials, all the while making franchisees feel like they're a valuable part of the process.

Martin describes how the American Leak Detection Intranet site has a forum that allows operators to track down misdirected insurance payment checks. "If an insurance company sends the check for payment of services to the wrong American Leak Detection office, that office can post the check number and payee information to a bulletin board on the site that will allow the correct franchise operator to locate the missing check and arrange to obtain it."

Other organizations are using their Intranet to provide training solutions. Pittsburgh-based GNC has had an Intranet system for three years but has started utilizing its capabilities for training just within the last year. "We have used our GENESIS (General Nutrition Electronic Support Information System) primarily for product information training," says Ken Neagle, training manager for GNC. "But we are also using video streaming to provide our owners and operators with other important information such as sales and customer service training." Neagle says the training modules are interactive and allow the franchisees to actively participate. Neagle estimates that 70 percent of the more than 1,700 GNC franchises worldwide use the GENESIS system.

"One way we have begun getting more out of our Intranet system is by forwarding sales leads we receive to the appropriate franchise operators," says Decorating Den executive vice president and COO, Dick Deerin. He says at least 85 to 90 percent of their nearly 500 North American franchisees use their Intranet system regularly. "It's our primary means of communication and we require all new franchise operators to use it," emphasizes Deerin. The system is called DecoNet and it includes a very popular and active open discussion forum according to Deerin. The Decorating Den Intranet has been operating since April of 1998.

MGW Group's Intranet is called Cookie Connection and it's been operating for about two years. "Something we have had a lot of success with on our Intranet site is quick polls", explains Shunk. "We might ask 'how is your marketing plan working?' or 'are you coming to the next convention?' I'd say the response rate for our quick polls has probably been in the 75 percent neighborhood."

GNC's vice president of franchising, J.J. Sorrenti agrees with the concept of polling franchisees through the Intranet. "It's been an excellent feedback tool and I'pd estimate we get 80 percent response rates when we do it," he says.

Interestingly, one of the earliest and most fundamental uses of Intranet sites continues to be one of the most important, timely information exchange.

Deerin says that Decorating Den's owners have unique challenges and problems that are effectively addressed via the open forums. "It's critical for our people to share information on a regular basis in the open forum we provide. Discussions can go on for pages, one discussion leading to another with valuable information and solutions being exchanged daily," he says. The company's DecoChat component features forums for accounting and advertising as well as its popular open forum.

The open communication concept is seconded by MGW Group's Shunk. "The ultimate value of our Intranet is really an intangible. It's the fact that it offers us better and faster communication within our total system and that builds better relationships," he says. Shunk says the system allows franchisees to help each other out by asking and answering questions, offering ideas, and experience - all online. "And, it allows us to keep our fingers on the pulse of our organization by monitoring all of this," he explains.

GNC's Sorrenti gave a prime example of the almost instantaneous efficiency of the Intranet. "Just today we had an executive promotion here and in just another hour or so, our franchisees will know about it. In the past we would have had to write the announcement up and then mail it out. It might have taken five days or more before our operators heard the news," he explains.

The Vendor Angle

Intranet systems can provide some unique opportunities for vendors as well. One trend IFX Online's Martin has observed is the vendor-sponsored bulletin board or forum. This may include a vendor's banner ad and/or links to their web pages, but maybe more importantly can allow vendors to moderate the boards, answer questions and even update franchise operators on new products and services. Vendors can also advertise that they'll be exhibiting at upcoming conventions or conferences.

Memphis. Tenn.-based Amerispec's chief operating officer Steve Wadlington says the franchise has allowed vendors access to its BOSS (Business Owner Support System) Intranet system to answer questions pertaining to the vendors' products. "We've had a couple of companies that we've allowed access to our system due to the technical nature of their products so that they could answer our franchisees' questions specifically and directly," explains Wadlington.

Deerin says Decorating Den allows its preferred suppliers access to its DecoNet system. "We have a design center online feature in our online library that offers direct links to vendors' web sites," he explains. "We also recently started a program that allows our owners to connect to the fabric mills in Europe so they can precisely match colors and closely view the weave of the fabrics online."

"We presently set up links to selected vendors on our system," adds GNC's Sorrenti. "We are considering allowing vendors to advertise on our site, with one advantage being it would help offset some of our costs." Others like MGW Group's Phil Shunk are looking forward to working their vendors into their Intranet systems. "Certainly we want to give our franchise operators access to vendors we have screened and approved of," he says.

A Financial Exchange

One emerging area of growth and possibility for the Intranet involves the exchange of financial data. Traditionally, franchise operators may have had a software product available to handle basic accounting onsite, but these systems typically involved time delays in transferring of printed information and often required double entry of financial data. The Intranet can offer immediate transfer of information and input from both the franchise and franchisee side. It can also allow franchisees to log on and generate all kinds of reports, historical analysis, projections and benchmarks for their stores.

Decorating Den's Deerin says the company is not presently using its Intranet to exchange financial data, but he looks forward to a day when they can. "We want to put the database online and allow our operators to log in and input all their financial reports, and have the ability to look at and run comparisons of their past sales performances. We'd even like the system to allow for electronic funds transfers so our operators could pay their royalty fees through the system as well," sums Deerin. He says the process would also eliminate a lot of double entry work for the company.

Shunk, at MGW Group, says the company is also looking toward financial data exchange via its Intranet site. "Our Intranet provider is currently working on a new function that will allow us to import and export financial data with our franchisees," he says.

GNC has "near future" plans to use its Intranet for exchanging valuable financial information with its franchise operators says Sorrenti. "We'd like our owners to be able to see reports today, that will help them be more efficient tomorrow. We'd also like to see electronic funds transfers," adds Sorrenti.

After September 11

Following the tragic events of September 11, many franchise systems experienced an amazing humanitarian use of their Intranet systems. For example, a GNC franchise owner suggested in a bulletin board post that those assisting in the relief efforts needed food and water. As a result, GNC donated supplies of Power Bars and water to those at the sites.

IFX Online's Martin recalls one franchise organization he works with where an owner posted to a board that his parents were stuck in Nashville due to the grounding of all airlines. In almost no time, another operator stepped up and said he had relatives in Nashville who would be glad to give the parents a place to stay.

In the aftermath of the attacks, Amerispec developed a program called Amerispec For America in part because of the feedback they had gotten from owners. During the months of November, December, and January the organization will be donating a portion of every home inspection fee to the Red Cross. Amerispec's Wadlington explained how they kept the owners actively involved in the planning stages of the project through their Intranet system. "We asked them what they thought about the project and we were responsive to their desires that it be sensitive to the whole situation and that it have the right image to convey what our company was really trying to do," he says.

Other franchise Intranet sites were filled with posted messages concerning donations to the Red Cross and blood banks, and how they were organizing fund raisers. Many more franchise Intranet bulletin boards were used to post feelings and thoughts regarding the tragedy and to try to rally each other, noted MGW Group's Shunk.

The Future

There will undoubtedly be new developments in the way Intranet technology is refined and used in the franchise world. As computer usage and processing speeds, and storage capabilities continue to increase, more complex solutions and uses for the Intranet will follow.

"I think there will be more B2B transactions, where franchisees will be able to order directly from vendors who are linked into the Intranet," says IFX Online's Martin.

Decorating Den's Deerin boldly states he'd like all of the necessary correspondence between the corporate office and its franchisees to be done online. "I'd like for every transaction to be done through the Intranet," he explains. "You could review and customize all orders, there would be a database full of leads, electronic reporting and data entries would be excellent and would eliminate some duplication."

"Auctions via our Intranet are something we'd like to do," says GNC's Sorrenti. "We want to set up a system similar to e-Bay, that would allow us to sell slow-moving products by allowing the franchisees to name their own price."

GNC officials are also looking into further developing their Intranet training modules to include online testing and tracking of salespeople and their knowledge of products. The company is considering a managerial module that would cover not only how to operate single stores, but also cover what's necessary to operate multiple stores, according to Neagle.

Shunk is looking forward to the day when all Cookies By Design and Cookie Bouquet franchisees will have access to a multifaceted marketing campaign where they can pick and choose whichever components of the package they want. "And we'll know that our site will always allow them to get the exact pieces, with the exact logos, and the exact colors, anytime they need them."

Amerispec's Wadlington sums it up when he says, "It's not the Intranet system that's valuable, it's the communication that it creates."

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