Restaurant Franchising: Optimize procurement and cut costs
Restaurant franchises

Restaurant Franchising: Optimize procurement and cut costs

May 2, 2024
Optimize your material costs
Order just what you need
Reduce your losses
Analyze your ratios

It's the longest and most complex process in the foodservice industry. Optimizing your supply chain management has become an absolute necessity to ensure the profitability of your network.

It plays a decisive role in maintaining the quality of your menus, while reducing costs and waste. So how do you manage your purchasing when you're expanding from 2 to 10 restaurants? What challenges do franchisors and franchisees face?


The challenges of multi-site management

Improving a restaurant franchise's supply chain requires much more than simply centralizing purchasing and negotiating prices with suppliers. We've put together a list of the inventory management challenges faced by our customers as they roll out their network:

  • Efficiently monitor the profitability of new establishments: No lack of visibility on ratios.
  • Avoid stock-outs or over-ordering: caused by poorly adjusted orders due to the lack of experience of newly-trained teams.
  • Avoid delivery errors and check invoicing details to maintain control over delivered raw materials.

These challenges become even more critical as production volumes increase. It is necessary to review all procurement processes for efficient inventory management when managing multiple restaurants.

This means adopting advanced technologies to manage your restaurant inventories. Precise anticipation of demand, as well as efficient management of supplier relations. The aim? To ensure quality and continuity of supply.


5 key points to optimize your restaurant franchise supply chain

An Oracle study showed that 87% of restaurants could save 22% on raw materials by improving their supply chain.

The greater the expansion of your restaurant network, the more you can benefit from economies of scale. To achieve this, it's essential to structure your brand's raw materials purchasing.

1. How do you forecast your raw materials requirements?

To ensure an efficient supply chain, it's essential to understand the franchising model. This model is based on a franchise agreement between the franchisor and the franchisee. The franchisee operates one or more stores under the franchisor's brand in exchange for a fee.

This collaboration requires strict compliance with the standards and guidelines set by the franchisor. This means sourcing and ensuring the quality of products ordered by the franchisee, in order to guarantee the uniqueness of the offering.

Define the quantities required and the frequency of orders for each item, and draw up technical data sheets to predict the right proportions.

Anticipating demand through forecasting

Analyze past trends to anticipate future demand. How many covers do you plan to serve each day? What is the daily customer flow in each establishment?

This will enable your franchisees to anticipate the raw material needs of each restaurant. In this way, you avoid stock-outs or unnecessary surpluses.

With this in mind, the use of an automated inventory management system is essential. Yokitup's sophisticated analysis of historical and current data enables you to accurately determine your raw material requirements.

This means ordering the right ingredients at the right time, rather than building up stocks. Not only does this approach enable you to cut raw material costs, it also reduces food waste.

Inventory and supply management software for franchises and restaurant chains

2 Control of incoming goods

Before the reception :

Before products arrive, make sure kitchen staff are informed of the day and time of delivery. Make sure you have the right staff on hand to receive the products. Plan deliveries to avoid peak hours and busy periods.

Day of delivery :

On receipt of goods, carry out a thorough check to ensure order conformity and product quality. Be sure to check expiration dates.

Organize the reception of deliveries in an appropriate storage area, in compliance with hygiene standards. Respect the specific storage conditions for each product. Arrange items for easy access during busy periods.

After delivery :

Contact suppliers to report problems and suggest improvements. This strengthens the relationship of trust and optimizes future deliveries. Carry out an assessment of the efficiency of your procurement and delivery processes at each reception. Identify strengths and areas for improvement, adapt your practices where necessary, and explore opportunities for process optimization.

3 Carry out regular inventories

To effectively manage your restaurant's raw materials inventory, it's essential to implement a rigorous inventory management system.

This involves keeping a regular inventory of available raw materials, establishing an initial stock and a final stock, and monitoring incoming and outgoing quantities of raw materials so that replenishments can be made according to the kitchen's real needs.

Free tool : Free inventory management solution

The data collected will give you an in-depth understanding of production requirements, including raw material needs. Effective inventory management will also enable you to limit losses and food waste by keeping a close eye on your stock levels.

By centralizing your data, you can easily monitor the performance of your supply chain. By analyzing your spend and stock levels, you can make the necessary adjustments to improve your purchasing management.

Free restaurant stock management software

4. Analyze the profitability of your menus

In order to control your material costs, it's essential to understand what sells well and what doesn't. The aim here is to understand where you're going to generate profits. The objective here is to understand where you can generate profits.

With this in mind, inventory management software becomes a crucial ally. Analyze your menu performance using centralized sales data from your inventory management software. This will give you a detailed analysis.

The engineering menu is an excellent tool for discovering which dishes sell best and which are less successful.

Practical info 👉 How to calculate the price of your dishes using the engineering menu.

With this information, you can avoid unprofitable dishes and reduce your purchases from certain suppliers for the corresponding ingredients. You'll be able to concentrate on the ingredients you need to prepare the most popular and profitable dishes. By using this data effectively, you can optimize your sourcing choices and maximize your profits.

5 Automate your raw materials purchasing

As a franchisor, you have a duty to make your franchisees' operational processes as easy as possible. It's imperative that you simplify the way they place orders with suppliers, in particular by centralizing data.

The creation of standardized recipe sheets ensures uniform production. This guarantees quality, reduces ingredient costs and improves operations throughout the network. In addition, the use of price lists avoids errors and unifies supplier prices.

Yokitup, the inventory and procurement management software, allows you to group and associate price lists with recipe cards.

In this way, you offer your franchisees the possibility of centralizing orders with suppliers. This approach simplifies the deployment of your outlets and facilitates the integration of new franchisees.

Procurement operations are centralized for accurate data analysis. This includes a review of each restaurant's purchasing volumes and supplier price trends.

Would you like to find out more? Make an an appointment with us to optimize your restaurant inventory management.

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