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 60 MULTI-UNIT FRANCHISEE I S S UE II, 2014