Digital disruption continues within the restaurant industry, and the problem is not limited to fast-casual restaurants. All restaurants face uncertainty as third-party aggregators, including Grub Hub, Favor, Uber Eats and DoorDash, continue to capture more of the delivery market. In some cases, market share among aggregators may reach 80% or more. At the same time, struggling restaurant operators try to find ways to make third-party partnerships profitable, even at the cost of under-reporting sales to franchisors. However, POS integration can help decrease franchisee under-reporting and alleviate problems with profitability in the era of omnichannel restaurants.
The Problem With Franchisee Under-Reporting
Franchisors have long-established relationships regarding royalties and franchise fees that individual restaurants must pay. These fees are often a percentage of sales, and in the age of restaurant delivery via third parties, it is challenging to track franchisee metrics. According to Fast Casual, the problem arises when franchisees game the system to fill orders of the third-party aggregator tablet list, not ringing orders up within the POS. Franchisors use the POS to determine royalty rates, as well as manage inventory. Underreporting undermines the integrity of a franchisee-franchisor relationship.
POS Integration Can Decrease Franchisee Under-Reporting
The answer is simple. Instead of trusting each franchisee to report accurate metrics, let data do the talking. In other words, the POS must be integrated with all third-party delivery service providers. Integration eliminates all uncertainty regarding orders submitted, canceled, and delivered. Franchisees see the benefit of positive reporting in the form of more inventory and accountability.
Meanwhile, profitability increases because restaurants can make informed decisions about third-party relationships. More importantly, integration eliminates the hassle associated with managing delivery orders, so direct costs decrease. This is in tandem with efforts to reduce franchisee under-reporting, creating visibility within the entire restaurant supply chain.
How to Further Reduce Under-Reporting in the Omnichannel Dining Age
There are other ways to decrease franchisee under-reporting, but they all have a common denominator. They include restaurant POS integration. Even the labor-management system should be integrated with the POS to enable better scheduling and management of kitchen workflows, says Franchise Performance Group. In addition, franchisees must account for inflation and market costs, such as those charged by third-party aggregators. Basically, it boils down to these critical steps:
- Track data regarding third-party delivery. Third-party aggregators generate more data for your organization, but this data loses value when left untouched.
- Bridge disparate systems via integration, centralizing data within the POS. Centralized data storage allows for increased use of analytics and data-driven reporting.
- Apply data to refine restaurant operations and drive profitability. Applied data from the POS can improve operations management, justify delivery services, and increase accountability.
- Report outcomes for franchisors. Reporting back to franchisors may open the door to assistance, accurate services, improved inventory management, and more.
- Repeat and expand as necessary. The entire process must repeat to allow for the continued growth of the company.
Restore Visibility in Your Restaurant Chains With Integration, Advanced Systems, and the Right Partner
Enterprises face uncertainty and lost revenue due to under-reporting, and they need a way to decrease under-reporting. Instead of trying to threaten enforcement measures and cost franchisees even more money, choose an alternative. Enterprises should focus on integrating all systems, including delivery services, with the POS. Integration is the key to efficiency and productivity within the restaurant. Find out how your organization can kickstart its POS integration by visiting Tacit online today.