Embracing Smart Tech for Franchise Success
The Australian franchise space is embracing technology to become more heavily engaged with their consumers, strengthening their brand and relationships with customers.
However, issues such as compliance, brand reputation and franchisor oversight are becoming more regulated, franchisors must be proactive in protecting their brand reputation and mitigating potential risks.
Best practice franchisors are embracing smart tech as the tool to strengthen their franchise both internally with their staff, and externally with their customers.
To first understand the benefits and value that smart tech can provide to franchises, it is important to understand the concerns that franchisors are facing.
The franchise model typically works by decentralising responsibility to franchisees. This grants them a degree of autonomy, while also providing them with the support and guidance of the broader franchise network. While this framework is central to the success of the franchise model, it also provides one it’s greatest risks – that it becomes increasingly difficult for the franchisor to maintain appropriate governance and oversight over the wider franchise.
Therefore, the main concerns franchisors have when it comes to workforce management, stem mainly from; compliance, governance and oversight.
Labour force compliance concerns, specifically wage rate compliance, tops the list as the number one concern franchisors have regarding their workplace responsibilities. These concerns are derived largely from the fact that franchisors lack ability to oversee the franchise’s labour compliance as a whole. Failing to observe factors such as Industry award rate calculations, employment and payroll requirements can have massive implications for not only the franchisee, but the franchise brand as a whole.
Employing smart cloud technology like Tanda, means that franchisors not only gain the ability to set and lock pay rates for every employee, but also the assurance that the system is in accordance with regulatory laws. Award interpretation engines, and fail-safe attendance tracking software gives greater compliance comfort for each level of the franchise, ensuring that employees are paid accurately for the time they work.
Smart cloud-based technology provides franchisors and franchisees with greater governance and oversight into the business, at each level. The ability to access data and resources provides greater insight into the franchise’s functioning, but also assists managers to make smarter strategic decisions for the workforce. These decisions have the ability to influence franchise profitability, productivity and workplace satisfaction.
More than just managing risks however, a Tanda workforce management solution also provides significant upside to Franchises.
Workers are typically more engaged in the rostering process, are happier that they will be accurately paid for the time they work and are typically less likely to turnover and express a more positive attitude than the alternatives.
Furthermore, with a better managed roster, Franchisees are given the tools to minimise Overtime Expense and thus reduce costs while Franchisors can gain effective benchmarking between their stores and add more value back into their Franchise network.
Our vision is to help our clients build more open, connected and predictive workforces, through the use of smart technology, that helps our clients to get the most from their workforce.
Smart technology is about empowering franchisees with the correct tools to further grow their franchise success, and providing peace of mind for Franchisors to protect their brand’s reputation and success.
Tasmin Trezise was a Panelist at the National Franchise Convention 2016, addressing the topic; “Risky Business- How smart tech can protect your brand and mitigate risk in your Franchise”. Panel facilitated by Keran McKenzie of MYOB.
Events & Media Industry Insights |
Greens MP introduces franchise wages bill
A new bill called the Fair Work Amendment (Recovery of Unpaid Amounts for Franchisee Employees) Bill 2015 was introduced to Parliament last week. The bill, sponsored by Melbourne Greens MP Adam Bandt, is a direct response to the recent 7-Eleven saga, in which the Fair Work Ombudsman has already found over $600,000 in underpaid wages and entitlements. The bill aims to prevent this by making the franchisor responsible for correcting underpayments if the franchisee is not able to pay staff correctly and on time. You can read the text of the bill here, as well as its explanatory memoranda. Nobody would argue that it’s fair how 7-Eleven staff were underpaid, but this bill skirts a fine line that all franchisors should be aware of. The bill is written in the typical legalese of the Fair Work Awards and the National Employment Standards, but the gist of it is: If a franchisee employer does not pay an employee by pay day, then the employee, or someone acting on their behalf, can give the franchisor a written demand for payment. The employee doesn’t need to do this immediately. They have 6 years from the pay day in which they can make this request. The franchisor has 14 days to pay the employee what they’ve requested. If the franchisor doesn’t pay the employee within the given 14 days, the employee (or a lawyer) can take the franchisor to court. So if the franchisor disagrees with the employee’s written request… it must go to court! The court must add interest to the amount already owed to the employee. This interest is calculated from the pay day (so at this point it’ll already be 14 days worth). In short, if this bill became law, every franchisor in Australia would have unknown liabilities on their books for the wages of everyone who’s ever worked at one of their franchises any time in the past 6 years. And they could get these written notices if a franchisee gets their payroll out an hour late. This bill could certainly set a precedent for even more responsibilities for head office over what franchisees are doing. We think this could significantly change the dynamics of franchise agreements and cause a lot of headaches. It’s important for franchises to be ready for this sort of thing. Whether mandated by law or common sense, as a franchisor you need to be sure that your franchisees aren’t doing dodgy things with payroll that are going to see your brand on the front page of the Australian. About the author Jake Phillpot is a Director of Tanda, a specialist time and attendance company focusing on the interpretation of Australian Modern Awards and Enterprise Agreements. Tanda maintains templates of popular Modern Awards including Fast Food, Hospitality, Retail, and Restaurant. These templates include the Fair Work mandated minimum wages of all levels of staff, as well as rules for penalty rates, allowances, and overtime based on the times that staff worked. For more information, read a Franchise Case Study with Red Rooster or call Jake on 1300 859 117. You can also request an enterprise POA.
Industry Insights |
What the hell is happening at 7 Eleven’s head office?
The Australian Senate enquiry into franchise business 7 Eleven’s alleged underpayment of staff has heard that two thirds of stores have been underpaying staff – that’s up to 10,000 people. In a scramble to resolve the issue, 7 Eleven’s management recently wrote to 15,000 former and current staff, encouraging underpaid workers to come forward. Early results have shown the underpayment has been endemic across the group. Where did 7 Eleven go wrong? As the enquiry rolls on, 7 Eleven will likely claim the data was unavailable to have enough oversight into the practices of franchisees. The other side of the argument will claim the 7 Eleven was simply hiding from a tough business conditions, and was happy to underpay staff to get ahead. What’s going to happen to 7 Eleven? The total liability of the losses is still unknown, but 7 Eleven has set up a third-party company “Independent Claims” which will hide the balance sheet liabilities, handle the underpayments and manage the claims. Head office is going to back pay staff directly, and then attempt to recover underpaid amounts from franchise owners. The big questions is how widespread this is across other groups. The fundamental economics of the competitive pricing models in franchise groups will likely come into question as the enquiry rolls on. It wasn’t too long ago that Dominos and Pizza Hut franchisees were up-in-arms about $5 pizzas, claiming it would force them to find cost cuts in other parts of the business. What should 7 Eleven and other franchise groups do? Head offices should review IT systems and get with the times. Franchise models are successful because of the combination of hard-working and well incentivised owners and best-practice scalable business systems. The best franchises are the ones with the best systems. It was this formula which saw the franchising model take the world by storm in the 20th century. Everyone is talking about big-data and the potential to be unlocked in customer data. A better place to start is to get all of the financial and payroll data in once place. Not only does this give full oversight into wages, but also allows head office to focus on optimising labour costs. The most successful franchisees we work with do one thing very well – they correlate their wage cost with their revenue extremely tightly. Only time will be able to tell the outcome of the enquiry. Our guess is this just the start and the recent Fair Work amendment bill will throw some serious fuel on the fire.
Industry Insights |
The Benefits of Cloud Software for Pubs & Clubs
Cloud technology is the latest technical evolution sweeping the industry delivering unprecedented value, capabilities and potential to businesses of all shapes and sizes. Pubs & Clubs are increasingly embracing new and exciting cloud technology; from automated inventory, mobile POS, and cloud payroll solutions. What is the Cloud? The cloud in its simplest form is a collection of networked servers that share information with each other. Some cloud servers are designed to store and access information like Dropbox, Google Drive, and iCloud. Other cloud servers are designed specifically to deliver a service such as payroll and accounting, or Point of Sale. Using the cloud instead of an on-site server allows you to access and store data remotely, from anywhere in the world. What is Cloud Software? Cloud Software, also known as Software as a Service (SaaS), refers to software that is delivered through the cloud. IBM describes SaaS as a better alternative, where users pay for a service, not necessarily the software itself. Cloud software provides innovative integrated solutions that actively work to enable users to do more. This has allowed for SaaS solutions like Tanda to emerge, providing a new approach to workforce management. Benefits of the Cloud for Pubs & Clubs Reduce IT costs Cloud software requires no expensive onsite hardware, infrastructure, upgrades or maintenance. It is instantly accessible via a web-browser, requiring no CD installation or hours long installing processes. This eliminates the need for dedicated server rooms, and means a reduction in your IT maintenance costs. Cutting edge security Cloud software solutions are the market leader for cyber security, overtaking the outdated security measures on-site servers employ. They outsource the burden of managing system security and stability to expert managed service providers such as AWS and Google. Coupling expert managed platforms with additional measures such as two factor authentication, ensures that your data is always securely stored and managed. Real time access anywhere Storing data in the cloud means that you can store and access data from anywhere, on any device. We know that running a Club is busy work, and that admin paperwork doesn’t always fit into standard hours. Cloud access means you can do your weekly roster or pay run, in the office or on the couch at home, without the trail of paperwork that can invariably follow you. It also means that all your data is securely backed up in case something unexpected happens onsite. Live updates without the hassle All SaaS solutions are powered by the internet, that’s what makes them so incredibly accessible. Hosting cloud solutions online means that software updates can be pushed to your system automatically, often completely free of charge, eliminating the manual system upgrade process and associated downtime. Connect your systems for more data Where previously you may have paid high figures for custom built integrations, now you can connect multiple systems together. This allows you to share information instantly across all systems. Connect you POS, Rostering and payroll systems for a more holistic overview of your Club. Pay only for what you use One of the greatest benefits of cloud software is that it’s designed to scale as your club grows, so you only pay for what you use. With unlimited cloud storage and technical support, you can use as much as you want, without incurring outrageous fees. And because you’re not pouring thousands of dollars into bulky hardware, that money can be much better spent on resources and investments that will grow your Club’s success. Technology is forever altering the way we live, work and play. As the world becomes more interconnected, it’s crucial that businesses are on the forefront of embracing new technology. For Pubs and Clubs, cloud solutions offer an unprecedented opportunity to not only streamline internal processes, but to also actively shape their business’ future success.