The Best Restaurant Supply Chain Secrets

September 2023

We’ve all heard the intimidating statistics about restaurant failure rates. They’re often as high as 80% over 5 years. Prospective restaurant owners are often looking for hidden wisdom to help their future business succeed – and your restaurant supply chain holds the key.

There are many factors to a restaurant’s success, some of them obvious: tasty food, great service, a good location, and sufficient staff, just to name a few. But other factors are less obvious, and harder to learn as a restaurant owner.

In particular, the economics of owning a restaurant can be a real challenge. You can do the food, service, staff, and atmosphere right, but if you’re not making money, you can only operate in a deficit for so long. Restaurants are a business, and they need to turn a profit.

That’s why a smooth, economical supply chain, and the vendor relationships that make it possible, are a successful restaurant’s secret weapon.

As a franchise, we’ve helped to open many restaurants, and have seen the difference these kinds of relationships can make. We’ve also had the chance to cultivate great relationships of our own, and to streamline our supply chains for Barrel House pubs around the region. Owners of our franchises are able to key into our existing, and frankly, excellent, vendor relationships, as well as building relationships of their own. While vendor relationships and supply chains for restaurants aren’t as obvious, we consider them the secret to a restaurant’s success.

Vendor Relationships: The Franchise Advantage

Barrel House Franchise Logo - a built in restaurant supply chain plan!To streamline your supply chain, the first thing you’ll need are good, reliable partners. And the best way to find good, reliable partners is to be one yourself. Building these kinds of relationships can take years, and if you’re opening a new restaurant, you may not have the luxury of time. Additionally, unless you are an experienced restaurateur, learning how to build vendor relationships isn’t exactly an easy task.

When you open a franchise location, you’re able to tap into years of good relationships with existing vendors, putting you leagues ahead from the start. You’ll also have access to a support team that can tell you more about building on those relationships, or starting new ones, from experience. Entering into a franchise agreement is a bit like attending a dinner party with a friend who knows everyone – it can make a lot of connections and open a lot of doors!

Save Time as a Franchise Owner

Building great relationships with restaurant vendors is often a time-consuming process, and one that’s easy to put on the back burner when the day-to-day demands of running a new restaurant dominate your to-do list. After all, if you need staff coverage for dinner service tonight, you have to prioritize that work over calling back a vendor about a shipment next month. Being part of a franchise is a huge benefit here, as the work of maintaining vendor relationships doesn’t fall to a single location. Instead, other owners, as well as corporate support, can help all locations connect with key vendors.

Leverage Franchise Expertise

In addition to saving you time, we’re able to provide our franchise partners with an unmatched level of experience. After all, we haven’t just opened restaurants before – we’ve opened Barrel Houses. Every industry’s needs are unique, and part of the benefit of opening a franchise location is leveraging the lessons we’ve learned along the way. We know exactly which kinds of equipment and supplies are most effective in our kitchens and dining rooms, and we pass that knowledge along to you. Compared to the trial-and-error that most new restaurants face, this is the superior system!

How to Find the Best Restaurant Vendors

We’ve developed our relationships, and there’s a common thread in the process of finding the best vendors. It starts with quite a bit of research, which can be time consuming, but pays off in the end. We rely on many sources for this investigation, including references from vendors’ existing clients, who can tell us more about how they operate.

From there, we’ll meet with vendors and get a feel for what they offer and how they prefer to do business. This is also a chance to identify any difference between how they typically handle things, and how we have found processes to work best. If there are differences, it’s a good chance to see how a vendor handles communication and resolves issues.

By this point, we’re usually able to identify the vendors that best fit the needs of Barrel House locations throughout the region, and negotiate contracts.

Better Vendor Relationships = Better Supply Chains

These negotiations are a huge advantage of our positive relationships with vendors. By building up a foundation of trust, and understanding the needs and opportunities of relationships with vendors, we’re able to negotiate better deals for all our locations, and are a major reason why franchising leverages the secret benefits of supply chains so much more effectively!

Franchisees Benefit from Supply Chain Management

One of the many benefits of opening a franchise location is tapping in to the resources of your parent company. At Barrel House, we’ve worked hard on our vendor relationships in an effort to build a strong supply chain for all our restaurants – both corporate-owned and franchise locations.

This supply chain is just one of the many resources we’ve put together for our franchise investors. But as you’ll see, it’s potentially the most important. After all, a supply chain can be difficult to build, but it’s absolutely crucial to keeping your restaurant economically viable in the long term.

What Franchise Owners Want

Michael Seid, a leading franchising consultant, notes that “Franchisees want their supply chain to be there without them actually noticing it. They want to make certain that the cost of goods is reasonable, and that when they order something it’s in stock so their business won’t be seriously impacted.”

And that’s not an unreasonable thing to want! Offloading the responsibility for supply chain management is one of the parts of franchising that’s most appealing to many of our location owners. It allows them to focus on the parts of the industry that they’re most passionate about, while being confident that the critical supplies that keep their business running will arrive on time and at a reasonable cost.

More Locations Lead to More Negotiating Power

Picture this: You’re opening a brand-new restaurant, and approach a major napkin distributor. You only need enough napkins to support your single location, and you don’t have the storage space or capital available to place huge orders – you’ll need smaller orders, delivered regularly. Will you get the vendor’s best price? Of course not!

However, as a franchisee, you are one of many locations. The size of the Barrel House brand is a huge benefit when it comes to negotiating power. The larger number of locations, larger order size, and relative stability of the franchise model can all help bring down pricing. After all, even if one location closes, the others will remain open to do business. In fact, since Barrel House is actively expanding, we can leverage our future growth to secure better deals today with the promise of more business tomorrow.

Building a Strong Restaurant Supply Chain

Your supply chain is about more than just fresh food arriving to be cooked. Construction supplies for new builds, kitchenware, dining room supplies, marketing materials, equipment, and more all need to arrive on time and under budget to keep things moving smoothly.

Without an efficient, affordable supply of necessities, it won’t matter if the food is tasty, the waitstaff are friendly, or the location is perfect. A restaurant simply cannot survive if costs exceed earnings, and in an industry with margins this thin, a healthy supply chain is the only way to remain profitable.

This is especially important in tumultuous times, like the recent pandemic.

Resilient Restaurant Supply Chains

As we all learned in the last few years, supply chains are a complex web of vendors that can be upset by all manner of disasters. The pandemic showed the fragility of most supply chains, but anyone who has experienced a natural disaster can attest that getting supplies in the midst of chaos can be a major challenge.

It doesn’t even need to be a large disaster. Smaller issues like a truck breaking down or a vendor’s supplier going out of business can impact your restaurant in ways you might not be able to foresee. That’s why being part of a larger business, like a franchise, can be such a huge advantage. Our wider network gives us the flexibility to be responsive to disasters both big and small, keeping the doors open for all our locations.

The Secret to a Successful Restaurant

At the end of the day, your vendor relationship govern your restaurant supply chain, and your supply chain will make or break your ability to succeed. That’s why, as a franchise, we’ve spent so much time and so many resources building strong vendor relationships!

The result is a resilient network of vendors bringing vital supplies to all our locations at a great price point. By leveraging the many Barrel House locations in our franchise, we’re able to negotiate better pricing than a standalone restaurant could hope to. And we do it all for the benefit of our franchise partners.

If you are looking to invest in a restaurant, vendor relationships are just one of the many ways we’ve been preparing to work with you. To learn more about working with Barrel House, with no obligations, we invite you to fill out our easy online form. We’re just as invested in finding the right fit as you are, and we’re looking forward to getting to know you!