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How creating an app for your franchise is ideal but also entails a few challenges for franchisors

Written by Eric Johansson on Monday, 10 June 2019. Posted in Analysis

Investing in a bespoke app can help your franchise give customers more value for their money. However, doing it wrong can be a costly mistake

How creating an app for your franchise is ideal but also entails a few challenges for franchisors

From 7-Eleven and Pizza Hut’s loyalty apps to Bluebird Care’s e-learning platform and Spun Candy’s app enabling customers to design their own bespoke sweets, plenty of franchises have created a better service by investing in innovative solutions to be used either via smartphones or tablets. However, the trend isn’t isolated to franchising. “The growth in app usage over the past couple of years has been phenomenal,” says Malcolm Carroll, director at BlueFinity International, the company behind Evoke, the rapid application development platform.

The numbers certainly back him up. For instance, by 2020 global mobile app revenues are projected to be worth $188.9bn, according to Statista, the statistics platform. While gaming app publishers like Netmarble and Supercell were the top grossing apps on Google Play Store, non-gaming applications like Tinder and LINE also made a huge profit. The revenues made were predominantly from app store purchases and in-app advertising. “Consumers love the speed and convenience of buying things via apps on their mobile phones and now expect businesses to have apps,” explains Carroll.  

Importantly, even though the top-grossing platforms were consumer-based, he believes it’s vital for franchises to invest in the technology to get an advantage over their rivals. “It’s even more important when a business is competing with larger or more established companies, where not introducing the right app makes the size of their business more apparent and potentially puts them at a disadvantage,” Carroll continues.

 It’s no secret why developing an app for your franchise can be advantageous. “Bespoke apps can help businesses by being tailored to their specific needs and requirements, rather than settling for a packaged software solution that isn’t customisable,” argues Chris Obdam, CEO of Betty Blocks, the company providing an app-building platform. Indeed, being part of the development of the app means franchisors can ensure it’s perfectly tailored to their business. “When in perfect alignment with the business in this way, bespoke applications can increase results and improve efficiency,” suggests Obdam. 

A second advantage is that it can provide huge insights about customers. “From gathering data in the field to giving clients the ability to buy from you through an app, you can collect invaluable data, which used properly and integrated can really fuel your business growth,” suggests Patrice Archer, CEO of Appy Ventures, the business-tech development company.

Moreover, having an app could also help franchisors retain clients as people always go for convenience. “Once installed on their device, they can use your app instead of a browser just for expediency,” explains Richard Pilton, managing director at Kayo Digital, the digital agency. That also means avoiding the risk of customers using browsers to search for your services and opting to go with a competitor instead. Once installed, business leaders can also use the app to send push notifications rather than sending emails.

Despite these huge advantages, investing in the development of an app isn’t a decision to make lightly. “Careful thought needs to be given to what you want the app to achieve,” advises William Charlesworth, associate solicitor at Child & Child, the law firm. This means considering carefully who the audience is, meaning both your customers and franchisees. You should also think about what your app will do differently from your competitors’ services. “Avoid blindly copying what has gone before – if your app isn’t offering anything different to the competition, it’s unlikely to maximise its potential impact,” Charlesworth continues.

However, there are unnecessary pitfalls to avoid when developing an app. “Most companies we work with think in silo when creating an app,” reveals Archer. “It’s an app to do X, instead of being part of a wider solution within your business. By thinking in silo and only about the one [user] case instead of the longer term roadmap of opportunities, this often means not only missing out on opportunities to serve clients but also leads to tech issues down the line when an additional facet needs to be added to the tech, often requiring a costly full rebuild.” 

And while apps may provide huge big data insights about customers, storing people’s personal details the wrong way can prove particularly perilous after the General Data Protection Regulation (GDPR) snapped into force in 2018. Therefore franchisors looking to develop a mobile service must tread carefully to avoid the wrath of regulators. “Each business and app will process and store data differently,” says Charlesworth. “[So,] before embarking on the development process, bespoke advice from a GDPR specialist is recommended to ensure data and privacy law compliance.”

Given most companies don’t have in-house skills to create apps, many businesses opt to outsource the undertaking of creating the apps. Understandable as this inclination might be, franchisors are advised to take steps to ensure that the ownership of the copyright won’t end up with the developer. 

“When original content is created, the default position in law is that the creator of that work will be the first owner of IP rights,” explains Charlesworth. To avoid a scenario where the developer owns the copyright and can sell the solutions to anyone else, including competitors, franchisors are recommended to enter a contractual agreement with the developer before the job starts to ensure all IP rights are transferred to the business. “This manages the risk of the developer ending up owning and controlling large parts of your app,” explains Charlesworth. 

And in the process, it might be worth creating a clause that ensures the developer has all the necessary permissions and consents from third-party content that might be used in the development process. “If the developer doesn’t have permission to use third-party content, you risk being sued by the owner of that content,” advises Charlesworth. 

Creating an app for your franchise can certainly give many advantages but it’s also clear that every precaution should be taken before embarking on this journey or risk legal challenges or ending up with an app that doesn’t add value to your business. 

About the Author

Eric Johansson

As web editor and resident Viking, Johansson ensures Elite Franchise is filled with engaging and eclectic entrepreneurial stories. While one of our most prolific franchise writers, he has sharpened his editorial teeth by writing about entertainment and fitness. Follow him on Twitter at @EricJohanssonLJ to catch up with his stream of consciousness.

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