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

You need to ensure that you have a solid supply chain. This includes sourcing, procuring raw materials at negotiated rates, precise inventory management and appropriate logistics.

Anaïs Adlerfligel

Anaïs Adlerfligel

9

Apr 2024

How to optimize the franchise supply chain?
In this article :

Franchisees are looking for your expertise in this field. In fact, it's one of the main reasons they look to join a restaurant network. We look at the importance of sourcing and centralizing supplies for franchises. By focusing on product quality and uniqueness, franchisors can offer their franchisees a competitive edge. As a restaurateur aspiring to develop a franchise, you understand the crucial importance of providing a high-quality culinary offering while effectively controlling your costs and margins. The key to your success lies in optimizing your supply chain management and reducing costs without compromising quality. With Inpulse, you can manage your inventory more efficiently and increase profitability, while maintaining strict control over product quality.

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 standards and guidelines set by the franchisor, including food safety and product traceability. In addition, the franchisee benefits from the franchisor's support in implementing optimized management practices for inventory, orders and supplier relations.

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 involves sourcing and mastering your know-how to guarantee the quality and uniqueness of your offer. It also means rigorous stock management to avoid food waste. Good management of stock levels allows you to take account of fluctuations in demand and minimize the risk of losses. The use of inventory management software enables precise monitoring of quantities and anticipation of requirements. Inpulse provides an overview of available stocks and helps forecast future orders based on past sales.

If they come to you, it's to find differentiating products they wouldn't be able to order elsewhere. You can develop specific references with your preferred suppliers, such as sauces, breads, particular meats... You can also create your own packaging (branded and pre-portioned) to ensure the quality and homogeneity of your dishes, and offer a cooking and assembly kitchen in the field. Managing ingredients and supplies is therefore a key element in the success of your catering business. Teams need to be well trained to manage stocks and reduce waste. Proper training of staff in inventory management procedures and the use of management tools is essential to ensure maximum efficiency and minimize waste.

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. For example, choosing products with a French label or 100% French products can reinforce communication around your brand. It can also reinforce customers' perception of quality and environmental responsibility.

Pizza Cosy, for example, is committed to sourcing tomatoes from a local producer for its entire franchise network. Similarly, Les Burgers de Colette offers carefully prepared recipes based exclusively on fresh, 100% French produce. National suppliers can offer local suppliers to meet these challenges. Using organic products and supportingorganic sourcing can attract environmentally conscious customers. Choosing local suppliers not only reduces delivery times and transport costs, but also supports the local economy.

Key strategies for optimizing franchise sourcing

The larger your network grows, the more you can benefit from economies of scale. To do this, you need to structure your network's purchasing. Optimizing franchise purchasing requires more than simply centralizing purchases 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 relationships to guarantee quality and continuity of supply. Accurate demand forecasting helps to adjust orders to avoid surpluses and shortages, thus improving customer satisfaction.

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 five 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 central purchasing bodies are vital, as they play a key role in providing the resources needed to keep your business running smoothly. Close relationships with a limited number of suppliers also enable better product quality management and smoother communication.

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). What's more, centralizing everything on a single tool saves time and ensures better inventory management. Centralized management also makes it possible to standardize processes and guarantee uniformity in the products and services offered by the entire network.

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 transmit precise 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.

Using software such as Inpulse enables you to bring together 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 : volumes and evaluation of out-of-network purchases...
  • 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. Optimizing supply chain management also helps to reduce costs, meet demand and guarantee better product quality, while minimizing waste and promoting sustainable development.

In conclusion, optimizing the supply chain for a foodservice franchise requires a strategic and well-structured approach. By mastering inventory management techniques, building strong partnerships with suppliers, and using advanced technological tools, you can ensure efficient and sustainable supply management. This will not only enable you to meet your customers' expectations, but also strengthen your franchise's competitive position in the marketplace.

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