Ace Hardware International expands to global markets, onboarding franchises faster with Azure

Ace Hardware has been empowering people to do it themselves for almost 100 years. As “the helpful place” and standing for the principles of service, convenience, and quality, Ace Hardware’s many locations help people maintain and preserve their homes with the personal service that’s hard to come by in big box stores. 

As the DIY market has continued to grow and expand beyond US borders, Ace Hardware International has evolved along with it to meet that demand in more than 60 countries worldwide. Because of this expansion, Ace Hardware International needed a better way to onboard and connect new franchisees with its industry-leading standards, practices, operations, and supply networks to set up stores for success and deliver its award-winning brand to market faster and more easily. Ace Hardware International did just that with Microsoft Azure.

Better, faster franchising

To enhance support for emerging global DIY markets, Ace Hardware International shifted its expansion approach over the past 10 years from supplying international wholesalers to a more complete licensed franchisee model. “Our franchise value comes from bringing our brand to market, and that’s where Azure fits in,” says Mike Berschauer, Vice President of International Operations and Customer Service at Ace Hardware International. “It helps us deliver a flexible, scalable system that gives franchisees the tools and practices they need to successfully represent Ace’s value.”

While implementing this new model in Mexico, Ace Hardware International realized it could deliver a better, faster solution with the cloud. Setting up franchisees with the digital assets they needed had historically meant building and maintaining datacenters. However, procuring equipment during the recent supply chain crunch threatened significant lead times, not to mention the challenges of navigating local logistical hurdles. Ace Hardware International determined that the cloud was the best way for it to gain the consistency of deployment, connectivity, reliability, and standardization it needed to support its franchise model.

Ace Hardware was already using various Azure and Microsoft 365 solutions and services in the United States, so choosing Azure for its cloud-based franchise solution made sense. The company worked with implementation partner Span, which had significant experience migrating on-premises solutions to the Azure cloud. With expertise from Span and Microsoft support, Ace Hardware International went from the conception phase to the minimum viable product it took to market in just four months.

An end-to-end solution

Through its Azure-based architecture and enterprise resource planning (ERP) system, Ace Hardware International can now provide new franchisees with a complete, end-to-end digital solution to get their stores up and running. When onboarding a new franchisee, the company spins up a new instance of its Franchisee Head-Office and Franchisee Store solutions in Azure, which consist of the ERP and point of sales (POS) functionality necessary to support new franchisee business operations, like inventory management and accounting, as well as the necessary technical integrations. The ERP solution runs on Windows Server in B-series and D-series Azure Virtual Machines, with its data requirements handled by Azure Data Factory and Azure SQL Database. Ace Hardware International monitors platform health with Azure Monitor, helps secure its environment with Azure Application Gateway operating as a firewall, and conducts updates with Azure update management center. Finally, to help ensure data resiliency, the solution relies on an Azure backup and disaster recovery solution.

Franchisees access their individual ERP environment through a URL that’s safeguarded by Azure Active Directory, which takes the burden of digital infrastructure management off of the franchisees and provides greater standardization and control for Ace Hardware International. Better still, Ace Hardware can provision and deploy resources faster and more nimbly than ever before. “With Azure, we can create a new franchise environment with baseline integrations, populate it with master data, and have a new store fully ready to receive inventory in 24 to 48 hours,” states Gene Leykind, IT Director of Business Systems at Ace Hardware Corporation. 

The ability to quickly and easily provision new stores with digital assets is a game-changer for Ace Hardware International. “We’ve opened 11 new stores in the past year since going live with our Azure solution—that’s a record for us and would have been inconceivable before,” says Berschauer, who adds that this newfound agility boosts the company’s ambitious growth strategy. “Our goal is to add 200 stores in Mexico alone over the next eight years, so growing the market and expanding our franchisees is our focus. Having the infrastructure to support our strategy through Azure is key.”

Ace Hardware International hopes to take its new end-to-end franchise model to multiple markets, and with the solution it built with Azure, the company gained the control, scale, and agility to do that. Meanwhile, franchisees are getting a high-performing, reliable, modern, and intuitive system, helping drive business in their stores and further supporting Ace Hardware International’s growth strategy.

The consistency of the cloud

The company’s Azure infrastructure provides greater control over digital assets and more agency to monitor and maintain environments, which brings greater consistency to its expanding global brand. “Being able to simplify, control, and package our back-office digital tools really helps overcome regional hurdles and standardize our franchises,” says Berschauer. “Rolling things out uniformly is always a challenge in franchising, but the capabilities we have in Azure—to put a system in place and see and rectify issues as they happen—really help with that.”

From an IT standpoint, Ace Hardware International’s ability to standardize and monitor franchisees’ digital infrastructure allows for better resource allocation and far fewer headaches when it comes to keeping systems running. “We can more easily assure business continuity with Azure infrastructure,” says Leykind. “Also, a significant win is that dependability of connectivity between franchisor and franchisee systems is no longer a concern. And with Azure Monitor, we have the observability solution we need to alert us to any issues, which we can then address without having to deal with a franchisee’s IT provider.” Adds Berschauer, “Our small IT team is very good at identifying and resolving problems and then talking through those issues for continuous improvement. The control we get with Azure Monitor to drive the competency of our staff and improve how our systems work and how we operate is just amazing.”

Concludes Leykind, “What I value most about Azure is the serviceability we can provide for our franchisees. We can respond to an issue fully understanding the baseline, and we have the control we need to manage it. This dedication to our franchisees put Ace Hardware International on the map, and our new franchise model will keep it there.”

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