Subway now requires all of its franchisees to submit their weekly sales and inventory reports electronically using new point-of-sale (POS) touch-screen cash registers.

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Subway now requires all of its franchisees to submit their weekly sales and inventory reports electronically using new point-of-sale (POS) touch-screen cash registers. With the new POS registers, clerks use a touch screen to punch in the number and type of items bought. Franchisees can quickly reconfigure prices and products to match new promotions. Not only is this POS method faster than using the old cash registers, but it also allows franchisees to view every transaction as it occurs—from their own back office computers or even from home. Also, individual POS terminals within the restaurant are linked, so franchisees are able to see consolidated data quickly.

The transition to electronic reporting and networked POS terminals, however, has not been without bumps, as Stan can testify. About six months before the deadline for all Subway franchisees to “go electronic,” Stan attended a heated meeting on the topic at his local chapter of the North American Association of Subway Franchisees (NAASF). The NAASF is an independent organization of franchisees that serves as an advisory council on Subway policies and issues of common concern. Everyone seemed to be talking at once.

“I just don’t trust these machines. What am I supposed to do when the system crashes?” complained one man. “Yeah, and I don’t like the idea of a bunch of kids knowing more about how to run the software than I do,” said one older franchisee.

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“Don’t be so quick to assume that our sandwich artists will love POS,” said one woman. “I overheard one of my employees say to another, ‘POS means Peeking Over Shoulders.’ These young kids we hire have more reason to be resistant than we do!” “I’ll say they do!” rejoined Jay Harden, the president of Stan’s local NAASF.

“Employee theft is one of the largest problems we face as franchisees. I, for one, really welcome the cash control we get with POS.”

Stan had to agree with Jay. Training staff to record every sale and record it correctly is a critical component of a cash business such as Subway. In Stan’s view, the POS machines would only make that training easier. Cash control is built into the new system, which also provides the owners with information that will help them spot problems – such as employee theft – and track trends. Of course, thought Stan, the chore of counting down the cash at the end of a shift remained. No matter what type of computer program you install, cash still must be counted down and rectified with the register tape at the end of each shift.

As the voices rang louder around him, Stan thought about what had happened that day when Ellen closed out her cash register drawer. He had spent hours figuring out a discrepancy between the cash in the drawer and the register tape. Ellen had forgotten to void a mistaken entry for $99.99. Stan had first suspected that she had made a huge error in counting change.

Thinking of errors in counting brought him back to the topic of the meeting. Stan raised his hand to speak. “One thing that concerns me is the potential for accounting errors. I still have to key in data from the POS terminals into my Peachtree accounting software. Every time I have to reenter data, the potential for error multiplies.”

“That shows good foresight, Stan,” said Jay Harden. “We’re actually exploring computer programs that will feed the data directly from the POS terminals into our accounting programs.” Even some of the technophobes and POS skeptics in the group had to agree that it would be a great idea.

Question:

Resistance to change is not just about lack of ability or skill, but those are important. Create a list of factors at the heart of resistance to change and, from your personal experience but targeting Stan, prioritize them. For each item on your list, suggest to Stan how he might ensure the adoption of the POS terminal will accomplish these key accounting and business goals.

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