Brands looking for partners to help manage fast-paced change.
By Thomas Cullen
In the constant change that defines today’s restaurant industry, many brands are turning toward facility services partners who specialize in program and project management in order to enable fast, large-scale change within their stores.
The trend is fueled by the brands’ in-house facilities capability, which expands and contracts in direct proportion to their corporate-to-franchise store ratio. For many brands, housing a full-service, in-house facility group can be an overhead cost challenge in a market with tight margins and demanding financial performance expectations. The continued trend toward franchising — and even re-franchising in the restaurant industry — adds further evidence that partnering with key facility service vendors will continue in a positive direction. Even more recently than the chart in this article indicates, McDonald’s Corp. and Yum! Brands have embraced this strategy, and soon we could see franchised units approach the 80% threshold.
Opportunity to Bring More to the Projects
Accordingly, we are seeing more and more brands looking for partners — looking for companies to bring them high levels of expertise in facility services to either supplement or replace their in-house activities. They are looking past traditional vendor relationships. They need partners that bring strategy, management and execution. They need companies that know all areas of the business and that have a robust network of proven and trusted suppliers to implement the changes.
With the competitive pressures growing, brands need to be lean, nimble and technologically competitive. The shrinking of in-house facility expertise and capabilities presents obstacles, and simultaneously opens up new opportunities within the entire facility services industry. The opportunity to serve the brands is expanding greatly into the front-end planning and overall management of capital projects. True value is moving beyond the simple point-and-click installation projects for a handful of locations. From the brand’s perspective, the business is growing more and more complex. There is more equipment, and it’s being asked to do more, as well as last longer and provide higher ROI. The back of the house of a typical QSR is more crowded than ever, and the food safety regulations are becoming more stringent, fueled by recent incidences of foodborne illness. The scope of change is increasing from small projects within a few stores to substantial programs encompassing hundreds of stores, simultaneously. All of this is being done amidst shrinking in-house resources and shifting corporate/franchisee ownership models.
So brands are looking to leverage the expertise and knowledge that exists in the industry, but outside of their own organizations. Increasingly, they are seeking strategic partners to step in and assist from the ideation phase forward, and help to assess the overall impact on facilities, and proactively address implementation considerations and obstacles. This model enables brands to identify early all of the potential “surprises” that a capital project may conceal, and finding these at the outset of a project will keep timing and cost on track as the project progresses, and will further enable the speed and efficiency to deliver aggressive project implementation timetables to stay competitive.
Get To the Table
I don’t consider this new business model “outsourcing,” by any means. There is much more to this effort than employee overhead cost savings. Brands are looking for facility partners to step in and become extensions of their team. They want facility partners to be at the table with them and to bring their well rounded knowledge and experience. They want facility partners to know, understand and be aware of their success, obstacles and path forward. They expect a one-stop-shop offering a range of services from consulting and planning to sourcing of contractors and full project implementation management. In this emerging model, facility partners seek to act more as their staff, not outsourced vendors. They manage their facility partners as a single point of contact for their multi-faceted programs. The facility partners build, source and deliver.
Importantly, this shift in business model brings benefits to facility partners and the brands themselves. They see lower overhead cost, simplified program management responsibilities, and an increased level of expertise. Those in the facility services industry see an expansion of opportunities to provide value to their clients. It’s like an affirmation of facility partners’ importance in the process — a nod of approval from brand customers that they trust and rely on these services as critical elements of their business strategy.
I’m sure not all brands will be interested in playing in this new program management arena. It will be a niche area served by those with strong consultative and multi-disciplinary planning experience. But, sourcing for specific facility capital projects and programs will become critical, and the opportunities for strong partnerships and working level relationships will gain among all companies in the facility services industry. To keep up with the speed of change and assure implementation quality and timeliness, program managers will have to come to the table with proven teams. Each link of the chain will have to be strong or the ultimate capital deliverable is placed in jeopardy. This means that even traditional competitors could be found working side-by-side to affect change for the brands in an efficient and effective way.
Let’s Bring the Value
The pressure to change quickly. The pressure to succeed. The pressure to grow market share through creative and innovative menu and store refreshes. The pressure to be profitable. These are the everyday realities for the brands. It’s not an industry in crisis, but it’s an industry in an intense state of competition and we’re all being called to serve at a higher level. Brands are asking for more thinking, planning and innovative solutions. They are asking facility partners to work more closely together within our industry, within a program mentality that provides seamless solutions and solid outcomes.
In response to their needs, facility partners need to expand their traditional business model thinking and respond to the needs of the brands. Their role in the industry is expanding and growing in importance. The facility industry needs to take a fresh minded approach as “projects” turn to “programs” and “vendors” turn into “partners.”
— Thomas Cullen FCSI, CFSP, is president of Facility Solutions, Inc. Clinton Township, Mich.-based Facility Solutions, Inc. provides nationwide project management, construction management and consulting services to the restaurant and retail industries, and specializes in executing high-volume, high-speed foodservice equipment and fixture rollouts. Email the author at [email protected].