Multi-Unit Franchisee Magazine Issue II, 2014 | Page 62
IN-HOUSE OR OUT?
you to keep focused on your people and
your customers, on operations, marketing, and HR—the main functions you
have to take care of in your business.”
InfoSync has clients who operate
more than 6,000 restaurant locations,
as well as a few in the senior living and
hotel sectors, says Oden. They range
from multi-unit operators with 5 to 10
locations to publicly held
restaurant companies with
One-stop shopping
up to 350 company-owned
David Oden is a financial
locations and nearly $1
executive who has worked
billion in revenue.
“We’ve designed our
in the restaurant business
for more than 25 years. He
outsourced accounting,
joined InfoSync as presipayroll, and reporting sodent in 2004, attracted by
lutions to provide them
the company’s integration
with the freedom to focus
of basic financial services David Oden
on running their restauinto one package.
rants, not on managing
“We believe it’s a big advantage to ac- internal administrative departments—at
quire multiple services from one provider. a cost that is significantly less than doing
You want your focus on the things that it themselves,” he says.
A franchisee with one, two, or three
make you successful. Outsourcing bookkeeping, accounting, and payroll allows locations can keep up, he says, but adding locations, often farther and farther
apart, requires a different set of expertise,
as well as systems many smaller operators don’t have or can’t afford. “If you
are a smaller franchisee, it is very difficult to have the people you need,” says
utsourcing financial administrative functions is a strategic option
Oden. With a fractional solution they
that quickly reduces overhead costs and results in an increase in
can achieve the efficiency without havthe market value of a multi-unit business. By outsourcing internal
ing less or more than they need.
departments such as accounting and payroll, multi-unit business
“All the clients need is to provide us
owners report saving as much as 35 percent versus their previous in-house opwith access to their historical information
erations—savings that are typically larger and realized more quickly than those generand tell us how they’d like it to work,” he
ated by internal process improvement initiatives.
says. “The big piece is the automation.”
Outsourcing financial functions offers other strategic advantages as well.
The software will not only connect to
Thinking of selling a certain concept or certain geographic locations of your
your books, POS system, labor, and all
multi-unit business? Outsourcing provides a variable cost structure per locathe data that feeds payroll or accounting,
tion, per month that will immediately allow you to right-size your accounting
it also will link up with your vendors,
and payroll processing costs for the concepts or locations of your business that
providing a larger, more comprehensive
you retain. This works for growing companies as well. The ability to increase
perspective on the business.
the scalability of administrative functions overnight is a huge advantage to those
The ongoing trends of franchisors
firms growing by “leaps and bounds,” usually through acquisition.
refranchising and of larger multi-unit
Outsourcing financial functions can also be an excellent way to provide a fioperators growing by acquisition and
nancial safety net by providing checks and balances by an independent third party.
diversifying with new brands often reFinally, using an outsourced financial service allows a company to benefit
quires additional infrastructure, along
from state-of-the art technology without the obligation of constantly upgrading
with its ongoing expense. “We see a
internal resources. Technology continues to provide greater efficiencies in operlot of operators diversifying into mulating a multi-unit business, but keeping up with and implementing the changes
tiple brands within their industry,” says
is time-consuming and costly. Using an outsourced third party can be a very efOden. This increases the complexity for
ficient way to take advantage of the most up-to-date technology.
the franchisee, who now must manage
—Dean Zuccarello, CEO and founder of The Cypress Group
multiple store systems, multiple formats
job right, they should be able to provide for the franchisee what they need
cheaper than they could find it at the
local level,” he says.
However, that doesn’t always work.
Case in point: Leath has six territories
open, but only four trucks to move his
portable storage units. “The way I pull
that off is that through outsourcing. I’m
having someone else move their valuables. I think that because they move
things professionally, they probably do
a better job.” But that’s not a blanket
solution. “In smaller cities, its better for
me to have third parties move things
around. In larger cities, I need to have
my own trucks.”
When it comes to the books, one of
the critical challenges of running a business is knowing where you are on a cash
flow basis in real time. “It’s difficult, and
here’s why,” he says. “I won’t see March’s
numbers until into April. And that’s how
it works right now for me.”
To remedy this, he’s working with
Bookkeeping Express (a franchise) and a
company called Xero (online accounting
software), who are developing what he
calls a new kind of QuickBooks for use
online. “T
ogether they’re coming up with
a solution for me, my local franchise, to
do my books,” he says. “They connect
directly into my software to see the income coming in, what bills are due, and
update my books every single day. Most
companies do it monthly.”
OUTSOURCING FINANCIALS
TO BOOST VALUE
O
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MULTI-UNIT FRANCHISEE I S S UE II, 2014