Multi-Unit Franchisee Magazine Issue II, 2014 | Page 60

IN-HOUSE OR OUT?
at the CEO’s table. It’s less expensive
than hiring a full-time middle-level
executive,” he says.
“A company needs to hire capabilities
that they recognize can significantly differentiate themselves, which is something
they’re going to need forever,” says Saxby.
However, for situations where a campaign
or initiative is time-limited, outsourcing
the needed expertise is the way to go.
“When major changes occur, you need it
now, not forever.” In those situations, he
says, “You don’t need someone to grow
with the company, you need someone to
supercharge your growth over the next
six to nine months.”
The “executive-as-a-service” professional becomes part of the leadership
team, but only for a limited time. That,
says Saxby, is where outsourcing the Csuite comes in: it allows a company to
bring in an experienced leader who can
work as part of the company leadership
team to realign the company’s vision,
set up processes for future growth, or
even create and execute strategies with

your team.
In the marketing sphere, for example, if
a franchisee is moving into a new market
or targeting a new type of customer, the
skill set is different from that needed to
keep an existing function going. There’s
no need to hire a full-time person at a
full-time salary. “It’s different to create something new, rather than
keep something growing.
That may be a good time
to outsource,” says Saxby.
When evaluating potential outsourcing companies, he says, 1) be very
specific on the skill sets
required, don’t just settle
Brad Leath
on someone who’s out of
work; and 2) it’s critically important to
get the right cultural fit, even more than
the technical fit.
“Make sure that whoever you bring
into your organization understands
what’s important to your culture,” says
McKenna. That person should also be

WHAT IS OUTSOURCING?

O

utsourcing is the process of delegating certain portions of your
operation to an outside company with expertise in that area. It allows a company to engage another company for what would normally be considered an inside function, such as sales or marketing.
Outsourcing offers advantages over traditional franchise consulting and advisory services. The company in need is able to choose from a much larger and
deeper pool of talent than what may be available locally; can target very specific
areas of expertise where it is seeking additional resources; and is free from the
base salaries, employee taxes, and other fees incurred through direct employment.
Perhaps most important, the outsourced team seamlessly integrates into the
company, working with them on a day-to-day basis and becoming a true extension of the team. Companies can enhance both their team and their internal
efforts through external sources.
An outsourcing solution can be implemented at any time, but is most effective with concepts that are relatively young, either from launch or within the
first 2 years, in all sectors of business, and with a wide range of growth goals,
anywhere from one to 10 units per month.
Another important aspect of the outsource solution is that it takes systems
beyond the initial set-up phase and works with them for the first 9 to 12 months
post-launch.
The outsource solution was deployed in response to the stage we are at in the
lifecycle of franchising. More than 50 years into the era of modern franchising,
traditional franchise consultants are still focused on showing franchisors how to
start a franchise; and once all the legal, training, and operational documents are
complete and the franchisor is ready to sell, the consultant walks away.
—Dick Rennick, Founder and CEO of Team Rennick

58

MULTI-UNIT FRANCHISEE IS S UE II, 2014

a contributor and be able to ramp up
quickly. “Make sure the person’s a doer,
not just a director or strategist,” she says.
“We’re focused on top-level marketing growth,” says Saxby. “Everyone
in my company is a seasoned C-level
executive.” He says they don’t want to
go back to Fortune 1000
boardrooms with their
meetings, politics, and
bureaucracy, and prefer
to make a larger impact
at a smaller firm. “People
can learn great things at
big companies, but it’s
really hard to double the
size of a large company.
That’s the allure for them
of small business. The ‘I
can make a difference’ factor in small
businesses is a huge pull.”
Outsourcing with two hats

Brad Leath has seven Go Mini’s territories in Western Tennessee, Western
Kentucky, and Southern Indiana. He’s
also the brand’s franchisor—or at least
one of them—which puts him in an unusual role when it comes to outsourcing.
“My territories are like the laboratory,”
he says. “ I start my vendors at the local
level and graduate them to corporate.”
Previously, the moving and storage
portable container company was a dealership model with about 220 dealerships.
“A handful of us bought 80 percent of
the company from the founder,” he says.
“The first thing we did was convert to
a franchise model. We went from zero
to 70 franchisees right out of the gate.”
Before that, he says, “We were really
over-outsourcing, with everyone using
their own local vendors.” After the company converted to a franchise model,
he began searching for ways Go Mini’s
could take advantage of economies of
scale and best practices.
“I try to outsource as much as I can,”
he says. “I don’t want to spend my time
becoming an expert in everything. If it’s
something extremely de-skilled or that
doesn’t require a lot of manpower, I can
do it myself.”
At the franchisor level, he’s built a
team of vendors, mainly to serve franchisees. “If a franchisor is doing their