“A good, easy-to-use point of sale (POS) system is vital to a franchise business,” says Marais.
“But just having a decent POS system is not enough; franchises need to make sure the POS is integrated with the stock management and ordering system to maximise efficiencies and avoid over- or under-delivery of stock and monitor sales trends effectively.”
Marais says a good POS system should be integrated with an ERP system to make it a true front-to-back solution and appropriate to the conditions of local franchises.
“For example, franchisees can choose to work either online or offline, which is ideal for businesses in rural areas with poor Internet connectivity, where it makes sense to synchronise the system with head office only a couple of times a day.”
Marais says a truly integrated system makes it easy for franchisees to manage their stock levels – and for franchisors to manage manufacturing, purchasing and logistics.
“The beauty of an integrated system is that, for example, by running a maintenance routine the system can generate purchase orders when stock reaches a minimum level, which a franchisee only has to review before emailing it to the franchisor. Then it’s a simple matter, for the franchisor, of consolidating the various purchase orders and passing them on to suppliers.”
Integrated systems also provide franchisors with rich information, says Marais. “If your POS is integrated with everything else it’s very easy to track, for example, what products are selling best in which regions. That enables the franchise operation to tailor its offering much more precisely to what customers want.”
At the moment, says Marais, franchisees typically have separate POS, accounts and stock systems, which a bookkeeper must reconcile at the end of each month. “This process is expensive and time-consuming, and it also means the franchisee never has accurate, up-to-date information; he’s always a few weeks behind.
“With a live, integrated system most of the bookkeeping is done automatically. The moment the POS module processes an invoice, the system automatically updates all the relevant nominal ledger accounts. It gives much greater control and makes for much better business planning.”
The high price of some systems has previously put this level of integration beyond the pockets of many franchises, says Marais, but new-generation systems are much more affordable.
“Typically the franchisor will buy all the modules and licences for the franchise headquarters, while individual franchisees only need a user license to access the full benefits of the total ERP system. It’s a much more effective way for franchisees to manage their software investment,” he concludes.
