As I frequently read the many local and national trade publications, I continually see photos of restaurant, foodservice and hotel consultants mingling with major vendors, equipment manufacturers and brokers. Mingling may be the wrong term – associating might be better, and it’s not always in a positive way.
In order for a consultant to make a real profit, it seems that many have resorted to accepting sales commissions from suppliers of everything from table linen to kitchen equipment and furnishings. This begs the question, who is the consultant really working for?
When the client is paying a fee, no matter how it is charged, isn’t it the consultant’s responsibility to provide that client with the most objective, fair and honest consultation possible? Or, should a consultant be selling them equipment or services they may not really need because the consultant can earn a commission?
I must admit that I own a major consultancy. Since we started, we’ve been offered all sorts of “deals” wherever we’ve worked, but we have never accepted one opportunity to represent a single company. Our ethical standard is that we’re working for the client and must be honest and open about our external relationships. That does not mean to say our company does not do business with other companies, but we never “represent” any company to our clients. The business deals we do are consumer oriented, not business-to-business. For example, we publish a consumer website with relationships with Google (for advertising), Amazon (for book and product sales) and various food suppliers (for consumer product sales).
In the past, we’ve worked with headhunter firms to place staff, and have been offered commissions. Those, we accept, but only as a pass-along savings to the client, not accepting any profit from the placements. We do not influence the client’s decision on who to hire based on commissions. That choice clearly must be on the basis of who is best suited for the job.
“Crazy”, you say? “Why not accept extra cash?” Simple. If we are providing a true consultation service, our primary goal must be to save the client money at every turn. How do we do that if we’re contractually obligated to sell them products, equipment or services? The truth is we just can’t. Nor can any other consultant.
While the companies that seek to have consultants selling their goods are trying to be very honest and demonstrate their goods to the people most likely to influence a decision, they go too far by offering commissions and in some cases, more. Sure, we look at pamphlets, read sales material and speak often with salespeople from these various companies. We go to trade shows to see what’s new, innovative and good for our clients.
When we are asked, “what is the best refrigeration for my new restaurant”, we can honestly answer, “we like… XYZ CORP’s product”, but we have an obligation to provide our clients with no less than three brochures, three quotes and an objective analysis. Our policies dictate that we always disclose that we have no financial relationships with the companies presented. By doing this, we can be totally honest with our clients and with ourselves.
Most consultancies are small businesses, with usually just a few consultants on their team. My consultancy happens to be one of those really quiet, larger firms, with consultants working around the world, handling projects of all sizes. The majority of the clients who engage us after using the services of a smaller firm all-too-often say the same general thing… “The other consultant was always trying to sell me something.”
Recently, we had a project in which the client hired an architect that had a similar deal with a company that makes booths, banquettes and custom seating. The architect’s designs, of course, included that seating. Despite the fact that it was the wrong choice for the space, the architect insisted on the seating plan. When it came down to it, the furniture was just inappropriate and it came close to costing the client his business. The restaurant was about to fail its inspections because the booths were too big for the minimal walkway allowance or the ADA compliance for a pathway. Had we not intervened, this new restaurant would have failed inspection, been delayed 12 weeks in opening and would have lost a projected $1.8 million from the delays.
Each time the owner pointed out that he did not like the furniture plan, the architect would cite the aesthetics and threaten the cost of redesign. The architect was more interested in getting that commission than he was in getting it right. Ultimately, a consultant (and even an architect) must ensure that his or her work is in the client’s best interest – first and foremost! Commissions should never be accepted for anything when you are advising a client about what to buy.
I challenge the consultants to live up to such an ethical standard. Yes, I am accusing some consultants of being unethical. But in doing so, providing them with the golden opportunity to raise the bar and meet a new professional standard of ethics that can only improve your standing with your clients. I also challenge any restaurateur out there who has a consultant to have them sign a pledge that no commissions are being paid to them by outside parties. Somehow, I believe many could not take such a pledge. The contract we have with each client has a provision in it stating that we do not accept such fees or commissions.
When choosing a consultant, look for integrity as well as skill and experience. Choose a firm that is devoted to your long-term goals and not their own short-term cash infusion.