The Role and Value of an Effective Advisory Board

How a dream team of franchise experts can help you grow your business.

SPONSOREDUpdated 2:14PM • 07/08/16

It’s tough to build your business alone. The idea of having the ultimate dream team of advisors to help improve your business is not a new one, but one that not everyone takes advantage of in franchising. Having an experienced team of experts who have dealt with the problems your franchise is facing, with multiple brands, can severely affect how well your business will do in the long run.

While certain elements of franchising are well known and well defined keys for success, there are others that need the knowledge and experience that comes from being in the industry for many years. This is where an advisory board comes in.

If properly assembled and structured, an advisory board will provide non-binding strategic advice to the management team of a franchisor. “A good advisory board will prevent you from making expensive mistakes and will allow you to connect with the right solutions,” explains Amit Pamecha, CFE and partner with Premier Franchise Advisors.

Advisory boards can be brought on to help solve numerous issues within a franchise, but there are a few common challenges that these boards are often trying to solve. Boards often assist with developing or refreshing the growth strategy, hiring new and qualified talent, and providing access to capital through members’ established networks.

“Access to capital and funding is an issue that many franchises have, and a well-connected board can help them with finding the right sources,” says Joe Bourdow, CFE and partner with Premier Franchise Advisors.

Those networks can also provide access to quality senior management candidates. Pamecha explains, “If you need talent and people, you can tap into the network of people who have been there and done that.”

Along with having many years of experience in the franchising industry, boards members can also provide new perspectives on issues that your management team has been dealing with. Members of the board may have had the same experience working at other franchises or sitting on other boards.

“A lot of franchise leaders don’t realize that you have the opportunity to bring in an experienced skillset, at a fraction of the cost,” says Bourdow. Instead of paying your all-star team full-time pay, you can hire them for the exact amount of time you need, which will help you pay it forward—from making expensive mistakes when it comes to areas of the business that have strong effects on the bottom line.

In order for a board to work well for your business, you will need to take it seriously with structured meetings and compensation for all members. To get the most out of your advisory board, you should have regular communication and clear expectations for what the board’s role is in your franchise.

A benefit to having an advisory board rather than a board of directors is that there can be more transparency between the senior management team and the board, which allows for better guidance for your business. Since a board of directors has the ability to fire management, less information might be shared from time to time due to fear.

It can be beneficial to have an advisory board from day one, or when issues arise that are outside of your senior management team’s expertise. “For a founder who's starting out, having a board to lean on in the early stages is a big help, especially because most brands begin with very little capital. As your company grows, it becomes even more imperative to have an advisory board because the growth strategy can plateau, and a good advisory board can help you change the strategy,” says Pamecha.

Building a team of three to five people with different backgrounds and expertise for the areas your business needs help with is key to getting the most bang for buck when it comes to an advisory board. This can certainly change over time as you bring on new members when different issues surface, and also remove those who are no longer needed.

Few entrepreneurs have expertise in every area of their business. This is where a well-rounded advisory board serves your business most effectively and can increase your decision-making confidence to make your business flourish.

The Role and Value of an Effective Advisory Board

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