Using Consultants to Improve Your Franchise
Consultants need to have a defined purpose if they are to benefit you. They should be an investment in your business to improve it and generate a few times their costs. If you think of using a consultant as an expense, you have the wrong approach. Think of it as an investment to generate a good return for your dollar, and then you are heading in the right direction.
Many of the big names of the franchise industry, in their semi-retirement, hang out the shingle to offer their services to anyone who believes their story and also become a 'consultant'. Interesting how their views on consultants can change!
Whether you are a franchisor or a franchisee, the offer of a 'let me make it right for you' solution can be either an effective fix or an expensive exercise for your business.
There are many different varieties of consultants in this industry, including:
- General franchising consultants
- Site selection consultants
- Franchisee sourcing and selection consultants
- Marketing consultants
- Brand consultants
- Demographic consultants
- Security consultants
And professions that are, in my view, consultants as well:
- Banking advisors
How do you pick a consultant to assist you? How do you work with them to achieve what you are looking for?
The first thing I say is that you are not hiring a consultant by the hour, but rather for the years of experience they bring to the issues you need assistance with. Most good consultants come with the necessary expertise and reasonable academic qualifications. There are also qualifications issued by groups such as the FCA (Franchise Council of Australia), the AIM (Australian Institute of Management) and the IMC (Institute of Management Consultants).
When you go to a doctor, a lawyer, an accountant or a surgeon, you know they have achieved a professional level to be allowed to work in their profession. Unfortunately, there is no such requirement of consultants across Australia, and the right to 'hang out a shingle' is one anyone can do, whether they have the experience, qualifications, or have just run a hot dog stand!
Good consultants, like lawyers, should be both qualified and keeping up to date with their area of expertise. The FCA runs programs aimed at professional development for the 'suppliers' to the industry and offers qualifications to recognise this – including the CFE.
A qualification issued by the IMC (worldwide) is called the Certified Management Consultant (CMC) and held in similar esteem to the CFE in franchising. It is only granted to experienced consultants who demonstrate the correct process in the projects they undertake.
How do you choose a consultant?
You want to engage a consultant who has the qualifications, expertise and experience to solve your issues. Value is the key to hiring a consultant, both in what they can deliver to you in terms of benefits, compared to the costs they incur to you. Think in terms of dollar benefit compared to the price. If all you are concerned about is the cost side of the equation, then remember you get monkeys if you pay peanuts. If you wish to ask for a quote, just make sure you are comparing like to like. It is very easy for someone to hang up a shingle and claim they are a consultant (at a low cost) and can do everything!
I also suggest you think of your lawyers and accountants as consultants. It amazes me how we will be talking to a client, and when asked about their lawyers, we hear they are using their local suburban lawyer - this to me would be similar to asking a divorce lawyer to handle your commercial franchise agreement. In my past life in Caltex as a property manager, it always annoyed me when a lessor would use his suburban lawyer to try and re-write the lease document or the franchise agreement, that was the standard from the Law Institute or stipulated by Government decree.
Specialist franchising lawyers and franchising accountants are there to handle franchise issues.
Another area you may want to ask a consultant about is, do they have suitable Professional Indemnity Insurance and Public Liability Insurance? If there is a problem based on advice or actions you have taken following a consultant's recommendations that have cost you a large amount of money, you may want to seek legal recourse.
How do you brief a consultant?
My suggestion is to have a list of what you wish to achieve. That may be broad things like:
- Find me suitable locations to open new stores
- New marketing image
- Develop our strategic plan
- Establish our territory planning correctly
- Improve revenue
- Improve our website
- Implement a process for site selection
- Reduce risk from legal issues
- Develop an online operations manual
These may come from your business plan, a strengths, weaknesses, opportunities and threats (SWOT) analysis, or just areas that you see are causing problems in your business
Once you know the areas you need assistance in, construct a simple brief, possibly with some measurable achievements:
- Implement a local marketing campaign where we expect five per cent coupon returns
- Improve revenue by 20 per cent average within 12 months
- Achieve 10 per cent improvement in mystery shopper score for my site.
This is often a process more about educating yourself on what you want to achieve, rather than just saying to a consultant “fix everything”.
How do you engage a consultant?
Once you have it clearly in your mind what you wish to achieve, then it is the consultant's job to convince you that they can do it, and meet your expectations in a timely, and cost-effective manner.
This may involve replying to your brief, forwarding a proposal which may include references and relevant experience in similar jobs, and who will be engaged on your project, and their experience and qualifications.
Once you are satisfied that this will achieve your aims, then you engage the consultant to undertake the specified work that has been agreed on.
Engaging a consultant is a balance between benefits they can achieve for your business, and cost or risk reduction for your business. Having a clear idea in what you want to achieve, you can brief the consultant, and measure their performance for your business. Don’t be misled by low costs, under qualified and inexperienced consultants.
The consultant you engage must be of value to your business, so select well, as they can generate good money for your business, and in some cases, turn your business completely around for the better.