How Franchise Suppliers Can Impact Franchise Growth

Franchise suppliers are companies that supply a franchise with specialized professional services, like marketing, consulting and legal assistance, or specific products or services that are meant for use within a franchise system, like uniforms, paper goods and computer systems.

“Supplier selection decisions made by franchisor executives normally have repercussions that are far greater than similar decisions made by executives in non-franchising companies of the same size,” Carl E. Zwisler, III writes for the International Franchise Association. “That is because the selection … can significantly affect the profitability and opportunity of numerous businesses operated by franchisees, as well as the economic stability of their employees, suppliers and creditors, in addition to the business of the franchisor.”

Finding a healthy balance between the needs of the franchisor and franchisee is incredibly important throughout this selection process. Mandy Rowe, president of True REST Float Spa, explained that any of the suppliers she even considers must provide some operational benefit to her franchisees. It is optimal for a franchisor to be able to access and monitor the relationship, but the supplier’s primary purpose and focus should be to support the franchisee.

In her franchise system, Rowe welcomes input and embraces flexibility. “I still rely pretty heavily on my Franchise Advisory Council (FAC). I know not all brands give their FAC that kind of transparency, but for me, I'm not going to sign someone on who I know may be a good concept if I’m not sure my franchisees will participate.” 

Often, franchise suppliers have the power to boost a franchise’s success, but enthusiastic participation is vital. Implementation of a new product or service, no matter how good it seems in theory, will not positively impact the growth of the franchise if franchisees are not willing and excited to use it. Testing the waters to establish relationships with suppliers that have proven products and services that will solve real problems franchisees are experiencing is what will lead to the most efficient growth.

“Obviously, a mom and pop shop can be successful, so suppliers aren’t the end all be all of success,” Rowe said. “However, it’s why most people sign up for a franchise. To have all the tools and resources but get the economy of scale of being part of a franchise.”

Dr. Ehap Sabri, supply chain consultant, author of four supply chain books, and co-founder of Shawarma Press, explained, “The franchise suppliers can provide scalability, quick and reliable delivery, responsive maintenance, and support, in addition to inventory alternatives that help avoid supply chain interruptions.”