Restaurant franchising: optimize your purchasing and reduce your costs

Purchasing is the longest and most complex process in the restaurant industry. Optimizing your supply chain 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 purchasing when you grow from 2 to 10 restaurants? What challenges do franchisors and franchisees face?

The challenges of managing multiple locations

Improving purchasing for a restaurant franchise takes much more than simply centralizing purchases and negotiating prices with suppliers. We have gathered the inventory management challenges our customers faced while expanding their networks:

• Tracking the profitability of new locations effectively: never lacking visibility on your ratios.
• Avoiding stockouts and over-ordering: caused by poorly adjusted orders due to the inexperience of newly trained teams.
• Avoiding delivery errors and checking invoice details to keep control over the raw materials delivered.

These challenges become even more critical as production volumes increase. When you manage several restaurants, you need to review all your purchasing processes to manage inventory effectively.

This means adopting advanced technology to manage your restaurants’ inventory, accurately anticipating demand and managing supplier relationships effectively. The goal? Ensuring the quality and continuity of supply.

5 key points to optimize your restaurant franchise’s supply chain

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

The more your restaurant network grows, the more you can benefit from economies of scale. To do so, you need to structure your brand’s raw material purchasing.

1. How do you forecast your raw material needs?

To run an efficient supply chain, you first need to understand the franchise model. It is based on a franchise agreement between the franchisor and the franchisee: the franchisee operates one or more outlets under the franchisor’s brand in exchange for a royalty.

This collaboration requires strict compliance with the standards and guidelines set by the franchisor. This covers the sourcing and quality of the products ordered by the franchisee, to guarantee a consistent offer.

Define the required quantities and order frequency for each item, and create recipe cards to plan the right proportions.

Anticipate demand with forecasting

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

This will help your franchisees anticipate each restaurant’s raw material needs. That way, you avoid stockouts and unnecessary surpluses.

To do this, an automated inventory management system is essential. With in-depth analysis of historical and current data, Yokitup lets you determine your raw material needs precisely.

This means ordering the ingredients you need at the right time rather than building up stock. This approach not only reduces your raw material spending, but also cuts food waste.

2. Checking goods on delivery

Before delivery:

Before the products arrive, make sure the kitchen staff knows the delivery day and time. Ensure you have the right staff on hand to receive the products. Schedule deliveries outside peak hours and busy periods.

On delivery day:

When the products arrive, check them carefully to ensure the order is complete and the products are of the right quality. Make sure to check expiry dates.

Receive deliveries in a suitable storage area that meets hygiene standards. Respect the specific storage conditions of each product. Arrange items so they are easy to reach during busy periods.

After delivery:

Contact suppliers to report any problems and suggest improvements. This builds trust and helps optimize future deliveries. After each delivery, assess how effective your purchasing and delivery processes are. Identify strengths and areas for improvement, adapt your practices if necessary and look for ways to optimize the process.

3. Carry out regular inventory counts

To manage your restaurants’ raw material stock effectively, you need a rigorous inventory management system.

This means carrying out regular inventory counts of the raw materials available, establishing opening and closing stock, and monitoring the raw materials coming in and going out so you can restock according to the kitchen’s actual needs.

Free tool: a free solution to manage your inventory

With the data collected, you will gain an in-depth understanding of your production needs, including raw material requirements. Effective inventory management will also help you limit losses and food waste by closely monitoring your stock levels.

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

4. Analyze the profitability of your menus

To control your food cost, you must understand what sells well and what doesn’t. The goal is to understand where you will generate profits.

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

Menu engineering is an excellent tool to discover which dishes sell best and which are less successful.

Practical guide 👉 How to price your dishes with menu engineering.

With this information, you can avoid unprofitable dishes and reduce your purchases of the corresponding ingredients from certain suppliers. You can focus on the essential ingredients for your most popular and profitable dishes. By using this data effectively, you can optimize your purchasing choices and maximize your profits.

5. Automate your raw material purchasing

As a franchisor, you need to make your franchisees’ operational processes as easy as possible. You must simplify how they place orders with suppliers, in particular by centralizing data.

Creating standardized recipe cards ensures consistent production. This guarantees quality, reduces ingredient costs and improves operations across the network. Using supplier price lists also prevents errors and standardizes supplier prices.

Yokitup’s inventory and purchasing management software lets you consolidate supplier price lists and link them to your recipe cards.

This lets your franchisees centralize their supplier orders. This approach simplifies the rollout of your locations and makes onboarding new franchisees easier.

Purchasing operations are centralized for accurate data analysis. This includes reviewing each restaurant’s purchase volumes and changes in supplier prices.