How do you ensure an efficient supply chain when launching a franchise?

The foundations of an efficient franchise supply chain

To ensure an efficient supply chain, it's crucial to understand the franchise business model. This is based on an agreement between the franchisor, owner of the brand, concept and know-how, and the franchisee, who manages one or more outlets under the franchisor's banner, in exchange for a fee. This partnership implies strict compliance with the franchisor's standards and guidelines.

Your franchise stands out for the products it offers.

Mastering sourcing and having unique references to offer your franchisees is a real competitive advantage. This means sourcing and mastering your know-how to guarantee the quality and uniqueness of your offering. 

If they come to you, it's to find quality and differentiating products, which they wouldn't be able to order elsewhere. You can develop specific references with your preferred suppliers, such as sauces, breads, special meats... You can also create your own packaging (branded and pre-portioned) to ensure the quality and consistency of your dishes, so you can offer cooking and assembly in the field.

Product sourcing can also be a vector of communication for your brand 

Another major challenge is to adapt the offer to local conditions. Demand can vary significantly according to region, season or local event. This can mean opting for local suppliers while guaranteeing the quality and traceability standards required by the franchisor, as well as complying with various regulations.

Take, for example, labelled or 100% French products. Take Pizza Cosy, for example, which has undertaken to source its entire franchise network from a local tomato producer. Or Colette's Burgers, which offers carefully prepared recipes based exclusively on fresh, 100% French produce. National suppliers offer local suppliers to meet these challenges.

Key strategies for optimizing franchise sourcing

The larger your network grows, the more you can benefit from economies of scale. To achieve this, you need to structure your network's purchasing.

Optimizing franchise sourcing requires more than simply centralizing purchasing and negotiating prices with suppliers. It involves adopting state-of-the-art technology for inventory tracking and management, accurate demand forecasting, and effective management of supplier relations to guarantee quality and continuity of supply.

Create strategic partnerships with a limited number of suppliers

Limiting the number of suppliers you use will enable you to ensure the quality and traceability of your products, giving priority to those that make you stand out from the crowd, guaranteeing fast, reliable deliveries, and promoting a relationship based on trust and proximity. This is essential for optimizing the franchise supply chain. On average, franchisors limit themselves to 5 main suppliers. Depending on the size of your network, you can move from setting up supplier lists with negotiated rates and conditions, known as central referencing, to central purchasing. These purchasing groups are vital, as they play a key role in providing the resources needed to keep the company running smoothly.‍

Opt for a central purchasing agency to facilitate procurement

The central purchasing group handles sourcing and negotiation with the network head's strike force, in order to obtain the best prices on products listed for franchisees. It also gives each franchisee access to supply logistics tailored to their needs, and enables the franchisor to offer products designed specifically by the network head (these franchisor-developed products can also be offered by suppliers without going through a central purchasing office).

Centralize purchasing on a single tool

Franchisees are looking for a concept that's easy to operate. You need to do everything you can to simplify their supply management, and that means centralization.

• recipe cards: these will accurately transmit know-how to guarantee quality, material costs and operational excellence. 
• price lists: to avoid errors, you need a tool that makes it easy to update your price lists and supplier conditions.

The use of software such as Inpulse enables you to collect your price lists, link them to your recipe sheets and offer your franchisees a single tool for centralizing supplier orders. From an operational point of view, you can easily duplicate know-how and offer it to a new franchisee thanks to Inpulse.

And from a data point of view, all supply flows are centralized for detailed analysis: 

• Purchasing analysis : purchasing volumes, evaluation of off-network purchases, etc.
• Price trends : variations in supplier prices over time...
• Supplier performance by facility : service rates, credit claims, etc.

Access to this data is essential not only to influence annual negotiations with your suppliers, but also to rationalize your flows. For example, you'll be able to find the right delivery frequency, or re-evaluate certain products that may have risen too much with inflation.

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