Wetzel’s Pretzels, LLC, opened its first franchise location in Redondo Beach, California, in 1994, much to the delight of throngs of eager customers attracted by the hot, mouth-watering soft pretzels. Soon, the franchisor’s stores were popping up everywhere, including Universal City, Dodger Stadium, Disneyland and Walt Disney World. Every pretzel is still hand-rolled, baked fresh and served hot from the oven.
As the franchise spread to more than 350 locations in the United States and six other countries, the menu expanded as well. Today, customers face the enviable dilemma: Should they pick a Wetzel’s Original pretzel, or go for a more exotic flavor like cinnamon sugar, almond crunch, sour cream and onion, jalapeño, or pepperoni? For those with a heartier appetite, Wetzel’s offers the Wetzel Dog — a pretzel wrapped around an all-beef hot dog, with or without cheese. Whatever they choose, they can wash it down with a frozen lemonade or a delicious frozen Granita.
As the Wetzel’s Pretzels franchise grew, the franchisor’s method for billing franchisees had become untenable. “The process was all Excel based,” explains Scott Putman, the company’s corporate controller. “Each week, we had to manually export data from our POS, manually import it into Excel, configure it and then turn it into a royalty file to upload to the bank. As we approached 300 locations, that process was taking a full day, and we knew it would only take longer as we continued to grow.”
In addition to being tedious and time consuming, the process was also highly prone to human errors. “For example, if you have a routing number in an Excel table and the cell is not formatted correctly, when you try to upload the file, you’ll get an error because, say, the first digit in the number might be ignored,” notes Mr. Putman. “There was also the constant risk of typos, especially given how large the files were getting to be.”
On top of that, the franchisor’s deal structures were becoming more complicated, involving factors that were impossible to capture adequately in the manual system. “For instance, when a new franchise first opens, its royalty rate might be 4%, but after the first 12 months, the rate adjusts to 7%,” Mr. Putman explains. “With our old system, we simply couldn’t effectively track important things like that across all our locations and ensure that the right changes happened on schedule.”
After looking at several software solutions, Wetzel’s Pretzels chose Restaurant365. “Restaurant365 made the most sense for multiple reasons,” recalls Mr. Putman. “It was simple to implement. It was cost effective. It had as much if not more functionality than the other products, and it was a lot easier to use. Plus, even though we weren’t ready to start using the accounting capabilities yet, we know we would already have a foot in the door on that.”
With Restaurant365, Wetzel’s Pretzels, LLC, has been able to slash nearly a full day’s work from its franchisee billing time. “Restaurant365 has delivered huge time savings,” Mr. Putman says. “It used to take us a full day to process our weekly franchisee billing with Excel. That’s 20 percent of our time. Now that we’ve automated the process with Restaurant365, it takes 30 to 45 minutes from start to finish — giving me back nearly a full day in my week. What used to be a tedious, manual and uncertain process is now very efficient and accurate.”
Moreover, the process is so simple and straightforward that Mr. Putman has been able to offload some of the billing responsibility to other employees. He notes that “now there are two or three of us who can process royalties instead of just one person who had mastered the details of the Excel formatting and all the other nuances of the old manual process.”
The automation in Restaurant365 has also dramatically increased the accuracy and reliability of the billing process. For one thing, Wetzel’s Pretzels no longer has to deal with files being kicked back due to Excel formatting errors or typos. “With Restaurant365, we simply don’t have those problems,” says Mr. Putman.
In addition, Restaurant365 can record critical details about the deal structure for each franchise location and make necessary changes automatically at exactly the right time, ensuring correct billing. “I can set parameters about a store’s billing rate schedule when I set up the store in R365,” Mr. Putman explains. “When the proper time comes around, I don’t have to remember to manually make the adjustment; I just set it and forget it. And that’s really a key thing for me: It takes the task off my plate and I know it will be done right.”
Wetzel’s Pretzels stores other critical information in Restaurant365 as well. “The solution securely warehouses not only all information about royalties, but also our banking information,” Mr. Putman adds. “Before, all of our banking information was kept in Excel spreadsheets, which was very risky.”
Though Mr. Putman acknowledges that Wetzel’s Pretzels is taking advantage of only a fraction of the capabilities of Restaurant365, what he does use proves to be extremely valuable for the business and he gives the solution a big thumbs up. “The functionality is extremely robust and it’s very easy to use. If you want to save time and have an efficient franchise royalty collections process, use Restaurant365,” he says. He also sees the potential value of Restaurant365 to his larger franchisee groups. “I would absolutely recommend Restaurant365 for any company that needs to manage multiple units or that has inter-company transactions or transfers.”