1) How long do your clients keep using the service?
Answer: We are still providing weekly audits for clients that started on day 1 of business in 1999.
Actually keeping clients for the long-term is one of the keys to success in our business and our most successful franchisees go to great lengths to keep their clients happy. Like any service business, if you don’t give your clients top-notch service, you will lose a customer. For example, technically our job is simply to give the owner a report that shows him exactly how much he is losing on each brand. However, our REAL job is to help the owner solve these problems and eliminate the losses (and we have lots of ways to do this). If an owner continues to have large losses, and you neglect to take this extra step, the client may eventually terminate the service after concluding that it doesn’t work. Working in Partnership with the client is crucial to success.
2) After you fix the problem, do they terminate the service?
Answer: Not if you explain the whole concept correctly from the start. We always compare our inventory count to the cash count that EVERY retail business must do regularly. The owner would never dream of stopping this cash count just because nobody was stealing money. Everybody understands that the cash count is really a DETERENT. The staff knows that it is counted and that they are ACCOUNTABLE for missing cash. Therefore, they are deterred from stealing. If the cash count was discontinued, you can bet that cash would start to go missing – and nobody would know about it.
Our service works the exact same way.
We do not simply carry out an Audit and give the owner the result. The key is to continue to add value to the client. We do this by working with them on their Inventory Levels, Improving their Sales Mix, setting up Stock Control Procedures and generally finding ways of improving their overall profitability.
3) Why don’t the owners do their own inventory control?
Answer: Of course, they do make some attempt to watch their stock, but their methods are hopelessly inadequate. They normally take inventory once per month simply to work out a cost of goods sold percentage. They never actually match up usage with sales. Often these owners think that their method works (which is our biggest challenge). However, the “proof is in the pudding:” – our franchisees will tell you that EVERY bar has a problem. In fact we generally without fail find losses of between 15 and 30% in all new clients. Some will be in areas that they have concerns about but the majority will be loss that they had no idea of.
There are some venues that will be carrying out a weekly audit in-house. The counterargument to this is that in todays commercial environment the role of a “bar assessment” has changed. With the technology that SCULPTURE HOSPITALITY offer we are providing a full profit and loss and this in itself is a specialised job, not one that can simply be apart of other duties for someone.
4) How much money can you make with a SCULPTURE HOSPITALITY franchise?
Answer: Obviously that depends entirely on your efforts. Average audit fees will differ from region to region but most of our audit fees are in excess of $250. There are very few costs to this business which is one of the key advantages of a SCULPTURE HOSPITALITY. Unlike most business once all your upfront costs are paid when you pay for your franchise there is no ongoing cost structure such as stockholding, lease or rent costs etc as with most businesses- probably the biggest expense is paper. Most people can do 10 – 12 audits per week after you get some experience. If you do the maths, you can see that one person can make a very good living.
Having said that, however, our top franchisees have found that this business is much better and more lucrative once you hire a few employees. Some of our franchisees have five or six employees and are doing in excess of 200 audits per month. When you go out on an audit, we will take some time to show you how much money you can expect to make at that level.
5) What do you get for the SCULPTURE HOSPITALITY Franchise fee?
– Our proprietary software program that makes the whole thing work.
– Two weeks of “hands-on” training in both with the software programe and week of planning and marketing in your territory.
– Ongoing support from a Regional franchisee in your area (our Regionals are also franchisees themselves so you are getting help from someone that understands every aspect of the business from personal experience). A Territory Business Plan that links to the overall Sculpture Hospitality Regional Business Plan
– Sales Training in selling the Sculpture Hospitality Service
– Both Regional and Global Conferences
– Marketing Support through websites and materials available
– Access to industry associations through Regional Membership
– Access to an international base of franchisees for sharing or gleaning information
– Clients through chain accounts as negotiated
– A protected territory that contains 250 licensed establishments. No other SCULPTURE HOSPITALITY auditors can come in to your area to compete with you. This is obviously critical.
6) How do you sell the service?
Answer: As our franchise grows, we are starting to find out exactly what works and what doesn’t. The best approach is to use several marketing strategies at the same time.
Direct mail has proven effective. SCULPTURE HOSPITALITY has a number of direct mail pieces, including an industry newsletter that is supplied to all franchisees to send out in their territory.
We are also contributing articles to Industry Magazines and Publications.
Personal calls, either by phone or in person, are a tried and true way to get clients. This method involves some work and effort on your part – not to mention patience and persistence – but it will absolutely pay off. SCULPTURE HOSPITALITY will teach you what works best. In fact, we have a training video dedicated to this task.
Most franchisees also exhibit in local restaurant trade shows. This is especially effective if you can get an invitation to be a featured speaker. Another great way to meet potential clients is to join the local trade associations, such as the restaurant association, etc.
7) Who is your competition?
Answer: In a few places our franchisees encounter small, local inventory services. These are usually one-man-shows operated by people who previously worked as bar managers or owners. They generally use the same techniques as the bar owners themselves use to try to “control inventory” (e.g. counting empty bottles, estimating pour costs [cost of goods sold] and comparing that number to prior weeks, prior years, and to other bars). Because their inventory counts are estimates, they are no better than their clients’ own estimates. And because they have no system comparable to SCULPTURE HOSPITALITY’S programe comparing use of product used to mils accounted for, they have little real knowledge of what is happening at their clients’ bars, and even less control. When our SCULPTURE HOSPITALITY auditors take over accounts from such independents, we generally produce profit improvements comparable to those achieved with previously “uncontrolled” clients.
There are some companies that weigh the product as Sculpture Hospitality does but these are few and far between. Sculpture Hospitality is the global leader in their field with offices in over 30 countries world wide.
In a broader sense, we compete for the bar owner’s dollar with a wide variety of “control” devices that bar owners can purchase and operate themselves. These range from security cameras to automated dispensing systems, to elaborate software programs on touch screen POS systems that can maintain a “running inventory” if the owner/operator accurately records all sales and finds the time to accurately record details of all purchases. Even then, the owner must accurately and frequently take physical inventories in order to gain any benefit from these systems.
8) Why are there not dozens of similar organisations competing with SCULPTURE HOSPITALITY on a worldwide basis?
Answer; Probably because a potential competitor would need to invest millions to develop and software program and database anywhere near as good as ours, and invest many more millions to hire and train employees to service bars in their target markets. Anyone considering doing that will realise rather quickly that he would be better advised to become a SCULPTURE HOSPITALITY franchisee.
9) What objections do you hear from bar owners?
Answer: by Far the most common objection is: “I don’t have a problem, so I don’t need your service”. We call that the “ostrich approach” to business management, and our task, is to convince him that he has an opportunity to increase profits by a multiple of our service fees. Because our services are unique, unprecedented, and highly cost-effective, our task is to educate the market rather than to sell our services. That is why so much of our business comes from referrals; our clients see the kind of dramatic profit improvements that they never before believed possible.
Other objections have to do with confidentiality (you will need to emphasise that our services are completely confidential), cost (often our franchisees offer a money-back guarantee that we will save him money or the service is free).
10) Do I have to do everything “by the book?”
Answer: SCULPTURE HOSPITALITY is one of the most “innovation encouraging” franchisors in existence. Sure, we have a great system for performing each of the functions needed to be successful. But our greatest strength is in the minds and imagination of our franchisees. The Franchisees’ Corner of our Website is chock full of “new tricks” developed by SCULPTURE HOSPITALITY franchisees from all over the world. The company reviews all innovations to ensure the accuracy of our analyses, and builds into our program updates the best new ideas developed each quarter.
11) Is the SCULPTURE HOSPITALITY service cost effective?
Answer: Our clients will give you that answer. We are getting more and more clients approaching us saying that they are currently doing their audits “in house”. Generally the average size bar has 2 internal members of the management team carrying out the task and the time frames that they tell us is that they take about 6 to 7 hours to get a result. That’s 12 to 14 hours of management time at a cost of somewhere between $400 and $500, depending on salary level. For the average size bar we are charging between $200 and $250. Add to this the accuracy and reporting functions that we will add together with the fact that there are 12 to 14 hours of management time that can be focused on other areas of the business then, yes, the SCULPTURE HOSPITALITY service is very cost effective.