Franchisees urged to embrace digital potential

The China Chain Store & Franchise Association said it’s encouraging franchise operators to ride the digitalization trend to upgrade services and drive further development. 

Pei Liang, director of the China Chain Store & Franchise Association, told the China Franchise Convention that the digitalization of franchise operations is driving further development of franchise businesses, with digital tools enabling direct connection between consumers and franchisers. 

China has the most franchises in the world but the scale of operations is relatively small, and the scope of their business is sometimes focused on a relatively small geographical area. 

Franchise stores usually pay franchisee fees in order to utilize the brand, know-how and central management, but scattered operations sometimes mean the franchisers have little knowledge of their direct consumers.

“Digital capabilities also enable franchisers to better monitor franchisees’ operation situation and promotional activities,” he added.

Local franchise stores are already taking the lead in terms of marketing and leveraging on social networking sites to target potential customers.

For example, franchise stores operated by Internet giants such as JD.com are leveraging digital technologies to help decide store locations as well as pick product offerings that would appeal to consumers in the surrounding area. 

Franchisers can also easily manage their product pricing through electronic price labels, giving them direct knowledge of store operation status. 

Sun Jian, chief executive officer of Home Inn Hotels, said the company is looking into the latest blockchain technology to manage customer loyalty programs and membership benefits.