Updated: Sep 8
Most of the branded QSR restaurant businesses use external audits to help protect customers and their brands. Many of their stores will be run by Franchisees, so the audits are also a way of monitoring the performance of their franchisees. Auditing every store several times a year can be costly, so it's important that the brand owner, the franchisees and the customers get maximum value from the investment.
To try and maximise the return on the investment, many businesses use the results of the external audits as a part of the performance management system for franchisees and restaurant managers. In theory this sounds like a good idea, but it can often have unintended consequences.
If audit scores by an external auditor are used as a 'KPI' that can influence a manager's annual bonus, then the manager's main focus shifts to the audit score, and ways to influence the score. This can involve lodging Appeals against findings, arguing about the fine details of a finding and even making complaints about the auditor - all with the aim of improving the reported score. This can often be a distraction from the primary aim of protecting customers and brands, and it creates a confrontational atmosphere for the whole audit process.
Contrast this to the way all businesses manage their financial performance. The site managers will track their own performance using simple indicators such as the site P&L, customer numbers, customer feedback, stock takes etc. The Manager will feel 'ownership' for these performance indicators, and the focus will be on taking practical actions to improve the metrics, rather than on 'gaming' the system. Of course there's always the risk that some people may be tempted to submit fraudulent figures, so businesses have financial auditors to review the data - but their role is to check the accuracy of the reports rather than to generate the data. This ensures that the ownership rests with the site manager, and also verifies that the data provided is accurate.
To replicate the way businesses manage their core performance indicators, the site managers can be given simple tools to perform regular 'self-audits' of their operations. The role of the external audit then shifts to verifying the accuracy of the manager's self audits. This has several benefits. The managers retain ownership of their audits and the related action plans, helping to focus attention on making real improvements that will benefit their customers. In addition, the frequency of the external audits can be reduced as it no longer the primary source of the monitoring data - resulting in significant cost savings.
If you use an external audit business, ask then for a 'hybrid' audit solution that combines verified internal checks with external audits. At TEAM we have two main types of self-audit: A simple wall poster 'Checklist' that the manager can complete and that can be
seen by all the staff to help communicate the Action Plans, and a mobile phone App checklist. Both system have a way to send the data to TEAM so we can prepare monthly reports for senior management, and the external auditors can also access the data for the 'Verification Visits'. Let us know if you'd like more details on our cost effective hybrid audit systems.