Supplier consistency

Why writing suppliers into franchisee contracts pays off

For franchisors with a keen sense of brand, it’s important that every new franchisee understands their responsibilities as well as their freedoms.

One way to ensure this is by writing suppliers and partners into franchisee contracts. This technique helps mitigate the challenges that can put a strain on relationships with franchisees and, importantly, get in the way of customer services and cost efficiencies. Crucially, this idea isn’t about being overly prescriptive as it has value for both parties.

Writing suppliers into franchisees’ contracts gives everyone peace of mind that outsourced partners have passed due diligence checks, understand the business as a whole, and can deliver their service to the highest standard.

Here are five benefits of writing key supplier relationships into franchisee contracts. For a franchisor focused on food service, these contracts might cover cleaning partners or wholesalers; for a business support franchise, this might be with a document and post-management company; while a franchise delivering early years activities or home tuition might have a contract that covers aspects of customer care, such as outbound calling, call answering or live chat.

1. Guarantee consistency for the franchisor

This is probably the biggest benefit to franchisors, as one supplier across a franchise network can help to ensure consistency of service, which means a more reliable experience for customers. All of this is crucial to protect the brand and its value, not to mention future revenues as the network grows. Consumer behaviour is changing and as a result, businesses of all shapes and sizes are increasingly wanting 24/7 support. When there’s a centralised contract in place, it can be much easier for suppliers to offer this benefit.

2. Help franchisees excel

One of the reasons franchising appeals to so many is because it provides a proven business model with an established operating framework and brand, so franchisees can hit the ground running. If key suppliers have already been engaged and checks completed at franchisor level, franchisees can concentrate on the all-important day-to-day tasks of running a business, safe in the knowledge that they have the right suppliers on board to thrive. Plus, when a supplier is working across the whole network, it’s better placed to add value to the franchisor and franchisees alike.

3. Save everyone time and money

Leveraging the purchasing power of the franchisor can help to reduce running costs for the network as a whole, as well as each individual franchisee. Instead of each franchisee spending time, energy, and money finding their own service provider and negotiating terms (or, as is often the case with call handling, recruiting a member of staff to answer the phone) the business stays nimble and with reduced overheads.

4. Convey what matters to the brand

When particular suppliers are written into franchisee contracts, it can help to convey the importance the franchisor places on certain aspects of the business or service delivery. It could be about cleanliness, accessibility, or customer care, for example. If it’s written in the contract, it’s much easier to maintain a set standard, as everyone knows the right supplier is in the frame.

5. Help with management reporting

This is an obvious point, but no less important. Having one supplier for a whole franchise network makes management reporting much easier. Often, it also means that the franchisor has greater transparency about what’s happening in real-time. In terms of call answering and live chat, this can be helpful in ensuring that all franchisees are being as responsive and accessible as required, identifying if further training or support is needed and even garnering networkwide customer insights from call and live transcripts, prompting service innovation.

The author

Jess Pritchard is head of franchising at leading outsourced communications provider, Moneypenny. She works closely with franchisors and franchisees to improve customer experience, capture leads, and ensure consistent levels of high-quality communication. Visit moneypenny.com