By Greg Nathan posted March 16, 2012

In the lead up to our recent "Bricks and Clicks" Forum we ran a research project in partnership with PhD student, Zhanna Kremez, from Griffith University. This involved interviews with 40 senior franchisor executives from a range of industries. Each executive was asked about current or future online sales strategies for their franchise network.  We discovered some interesting trend.

For instance the bulk of franchisors were taking a "wait and see" approach, despite clear trends that consumers will increasingly use mobile devices to buy goods and services. Of the companies interviewed, 83 percent were primarily bricks and mortar networks with combined sales of $5.95 billion. Of this group, 36 percent were actively taking orders from consumers online and had been doing so for an average of three years. The other companies were at different stages of adopting online sales into their distribution model:

  • 27 percent were currently testing their online platforms.
  • 46 percent were still considering their options.
  • 9 percent had decided online retailing was not suitable for their business model.

As part of this study franchisors were also asked to describe the main challenges they had faced in developing and implementing their e-commerce strategies. These were:

  • Deciding on pricing and revenue structures between franchisor and franchisees.
  • Managing the customer’s expectations between their online and their in-store experience.
  • Organising supply chain logistics and the reliable delivery of products to customers
  • Keeping up with rapid advances in technology.
  • Working with franchisee expectations and getting their buy-in.

When asked what had helped in the successful roll out of their strategies, the following themes emerged:

  • Doing through research and gathering good information.
  • Having a strong IT team working closely and collaboratively with the marketing team.
  • Adopting a methodical, careful approach to planning with solid pilot testing.
  • Educating and training franchisees in what the strategy means to them.
  • Maintaining ongoing positive and transparent communication on challenges and wins.

We thank the franchisors that helped out with this project and wish Zhanna well with her ongoing research.

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