Why do food Franchises now have ownership of online ordering platforms?
by Ordering on Jan 10, 2022 10:23:59 AM
Being a customer, you have probably thought about how convenient it is to have all your favorite restaurants and dishes all in one app? One-click gives you access to unlimited options and suggestions.
As a franchise, on the other hand, being a part of a third-party platform is anything but convenient. At first, many large food companies saw it as an excellent chance to attract a new stream of customers and have a possibility to expand at their fingertips.
[ However, being part of an UberEats or another similar platform became less of a trend and more of an obligation over time. ]
As franchises signed agreements and long-term partnership contracts, the commission prices started going up, and the level of profitability was not as high as initially expected.
As a result, most big food franchises are becoming less dependent and more self-reliant by investing in their own ordering platforms and acquiring an independent customer base.
Access to data
The primary reason franchises turn towards ownership of their ordering platforms is the access and ownership of customer data.
It is a lot easier to collect, store, and analyze all of your customers' information as an independent platform. Third-party platforms do not always grant access to all data or require payments before releasing detailed information.
As a franchise, data such as spending patterns, geolocation of each customer, demographics, and other metrics are crucial for understanding your customer and their preferences.
Having access to all of this data gives franchises a broader playground to innovate, improve their products and marketing strategy, which is more in line with the customers' desires. For example, the introduction of special deals or new menu items.
Another significant reason franchises turn towards independent ordering platforms is the exponential increase in commission fees.
Compared to the previous years, when third-party providers were only emerging on the market, they have now reached nearly unprofitable percentages of commission fees.
For example, UberEats charges between 15-35% commissions from their partners, additionally charging service fees and variable delivery fees. Mcdonald's and UberEats are among the most well-known examples of why franchises turn towards independent ordering.
Since UberEats was not willing to lower their already enormous rates, McDonald's decided to end their exclusive partnership in 2020 and operate independently and introduce collaborations with other platforms.
Brands, such as KFC, have already started implementing their applications to provide the brand's whole experience online. As mentioned by the CMO of the company, 'We want our fans to enjoy the full KFC experience with all the trimmings.'
All franchises, especially those specializing in food, have created their pool of loyal customers through consistency and reliability that the product will always stay the same.
Customers come to that franchise, regardless of their location worldwide, knowing that they can expect the dish, service, delivery, and full experience to remain the same.
The multisensory experience that the brand, such as Starbucks, created in-store can be difficult to recreate on a third-party application, allowing for limited customization. The entire experience includes colors, smell, design, and sound.
Having a fully customized website and an ordering app resembles at least a part of the real-life customer experience. It gives loyal customers a glimpse of what it's like to be inside their favorite store and enjoy the delivery of their product from the comfort of their couch.
For franchises, having their own platform enables interaction with loyal customers and implementation of variable pricing, in accordance with the current inventory, time of year, or membership deals.
Since commissions do not have to be taken into consideration, the franchise has more free room to alter the pricing and give discounts and limited-time offers.
Access to high-tech software
Access to advanced technology with real-time tracking and customizable features became easier than ever before. During 2020, many restaurants found themselves in a situation where they needed to implement online ordering in order to survive.
With the rise of demand, more technological advancements started to emerge. Franchises now have access to providers, such as Ordering, who can set up an online on-demand delivery platform in less than a week!
Franchises do not need to depend on third-party providers in order to have an excellent order management system in place, accurate geolocation maps, and POS integrations that match their customer’s needs.
To summarize, franchises are undoubtedly starting to benefit from investing in their independent platforms. There is definitely a deeper connection with the customer, a direct stream of revenue, and of course, more room to design their platform visually.
If you are a franchise, willing to start an independent ordering platform, check out Ordering! The system is fully customizable and has a beautiful, easy-to-navigate interface, which is competitive with any third-party platform. Additionally, you receive a free trial, live demos, and full guidance from an assigned enterprise specialist.
Topics: Online Ordering