“We need to stop using outdated approaches to grow our businesses” | Global Franchise
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Wednesday 7th December, 2022

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 “We need to stop using outdated approaches to grow our businesses”

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 “We need to stop using outdated approaches to grow our businesses”

Chief executive officer of Summa Franchise Consulting, Robert Stidham, believes that a ‘joined-up’ approach between franchisors and their partners is necessary for organizational success

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Throughout my career, I have been fortunate to work with and for numerous franchise, investment and business leaders who have deeply cared about the people in their organizations at every level.

This is a common trait amongst “best of class” leaders. In franchising, more than in many other types of businesses, we are dependent on the relationship between franchisors and their teams and franchisees and their associates to create success at every level. While sometimes underestimated, the relationships between franchisors and their most important partners, including attorneys, accountants and auditors, key consultants, and supply chain and other mission-critical vendors drive broad organizational success.

Occasionally, we have been involved with leadership teams that unfortunately had leaders who cared only about financial performance, and often led organizations in which associate engagement was low, partners were not valued, and turnover was high. The quality of work over time was often poor and those leaders failed as their business results declined.

In the current era of “the next normal”, the work environment, associate recruitment and retention, and employee engagement are all critical factors in the success of any franchise organization. The adage, “people create performance; performance creates profit” is now truer than ever.

Less understood are the power-of-people partnerships with those who can impact the organization from the outside. Ultimately, outside “vendors” provide products or services. On the other hand, outside “partners” provide value beyond the transactional costs for franchise companies.

Products can be copied; technology and training can be duplicated. People are a unique asset who can deliver results at the very frontier. No organization can bear the enormous cost of having every one of its human assets engaged as an employee.

We are living in extraordinary times – from the long-term effects of COVID on the way that we live and work to geopolitical uncertainty, the impact of recession and hyperinflation, and a rapidly evolving new normal, the way that leaders utilize their human resources has changed. Organizations have gone from being linear and hierarchical to concentric over the last few years.

The new people partnership (originally written about by Booz & Company) helps to define advanced thinking around how organizations must work. Outsourcing certain key aspects of a franchise company’s business is an important part of how franchise operators need to work today.

Do it for me versus do it yourself?

For franchisors seeking substantial growth, it has become increasingly difficult to achieve this goal using strictly in-house resources. Historically, our business was focused on North American franchise development for a variety of brands, and by every measure, we have been extremely successful in providing those services to a wide range of franchise companies.

The challenge is one of resources. Most franchisors cannot drive domestic or international growth and expansion by themselves. They simply cannot successfully execute a growth plan alone, and are increasingly attracted to a “do it for me approach”. But who is it you can find who CAN “do it for you”?

Partnering with franchise companies seeking growth

In 2018, we evolved our franchise and business consulting practice to focus on providing a broader array of services to companies looking to grow. At Summa Franchise Consulting, we further focused our effort on providing international development services from initial consulting, to finding development partners for franchisors, from initial planning to organization consulting, development transactions and long-term client profit growth. Our service model is based on providing these services directly to franchisors, and our economic model is principally drawn from fees that we collect as our clients are successful with their projects. Today, we do an unprecedented level of work, taking US-based franchise brands international. Conversely, we also have more projects bringing international brands successfully into the U.S. than ever before.

Creating the global franchise alliance program

We recently launched a new initiative to address opportunities for a seamless, global consulting practice – Global Franchise Alliance. This membership program between Summa Franchise Consulting in the United States and other franchise consulting firms around the world is designed to allow us to provide engagement to franchise companies that desire to build their franchise programs around the globe. Our initial partners include Crimson Management, led by Michael Smith in the United Kingdom, and Blue Seas Franchise Consulting, led by Scott McDaniel, who is based in Singapore but serves all of Oceana. The alliance will be announcing new partners in Brazil, Iberia, Italy, the GCC region, Japan, and South Korea later in the year. For clients, this means that they can leverage the power of the people who work within these firms. For international franchisors who elect to work with the Global Franchise Alliance, we deliver services on behalf of a franchisor from one country to another, utilizing our global team. Each member company of the alliance is selected carefully for its background, experience, expertise, capability, previous results – and the quality of its people.

It is impossible for any but the largest franchise companies to retain on staff the deep legal expertise it needs to oversee a highly complex franchising marketplace. Clearly, the legal and regulatory landscape, not to mention more typical transactions, are increasingly regulated and complex.

International franchise development is not the “Wild West” that it once was. In our company, we work with a variety of law firms but overwhelmingly find huge importance in working with one that can provide a solution to the myriad challenges our clients face. These companies are often owned by equity or publicly traded, adding an additional layer of complexity to the business.

We have developed a strong and trusted relationship over the last several years with Akerman, LLP and the firm’s unique franchise law practice team.

Having built a team of nine lawyers exclusively dedicated to serving the franchise ecosystem, Akerman provides world-class advice and guidance to clients in all phases of franchising, licensing, and distribution in the United States, and in association with law firms in other countries, around the world. Akerman offers its domestic and international franchise and licensing clients a team of lawyers strategically located across the United States and resident in the cities with the largest franchise activity. These lawyers assist franchise companies of all sizes as they confront numerous legal challenges — from federal, state, and international laws and regulations to the protection of trademarks and other intellectual property, to changes in the areas of brand standards, product safety, joint employer, officer and vicarious liability, cybersecurity, encroachment, antitrust, and unfair competition.

Deep expertise in the entire franchise ecosystem matters when delivering top-level legal services in the U.S. and across the globe. We have chosen to work closely with the Akerman franchise team because the firm’s lawyers bring more than 200 years of collective experience in advising and counseling startups, regional, national, and international franchisors, brand owners and investors, and licensors, as well as subfranchisors, multi-unit franchisees, and other businesses, in the areas that matter most to our clients.

These areas of particular expertise specifically include structuring, acquiring, and selling individual franchise locations and entire franchise systems; counseling on state, federal, and international legal compliance matters, including state franchise registrations; managing, negotiating, and documenting international franchise offerings; managing franchise terminations and resolving and litigating or arbitrating disputes. The firm’s client roster includes businesses in a wide range of domestic and international consumer-oriented and business-to-business sectors from early-stage and emerging franchisors to some of the world’s largest franchise companies spanning various industries, including hospitality, restaurant, healthcare, automotive, retail, cannabis, health and wellness, private equity, and real estate.

We and our sophisticated clients grasp a bigger strategic opportunity to drive performance and growth. It’s time for us within the franchise community to stop using outdated approaches to solving problems, growing our business, and managing people relationships whether we discuss our associates with a franchise or franchisee dynamic.

We, as all business leaders know, realize our people and partners are our primary assets, and in these times, we need to utilize them differently. The desire for success, within a disciplined delivery, framework can drive, sustain profitability, and long-term franchise system growth.

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