How To Set Up a Franchise Service Request For Proposal (RFP)

The Request for Proposal (RFP) tends to get a bad rep. It’s understandable. 

Overall, the RFP process can be time-consuming, complex and misleading. But there’s a reason RFPs have become standard practice for most modern businesses. While the delivery method has evolved dramatically with the digital age, the primary goal of RFPs remains the same.

Simply put, an RFP is a questionnaire-style document issued by an organization when they’re looking to buy goods or services. The benefit is that they standardize the process of evaluating suppliers, allowing companies to quickly compare vendors and select the best option for their needs. If done correctly, they provide businesses with crucial information that helps them make informed, strategic decisions.

Setting up a successful RFP takes tremendous preparation, coordination, research and skill, but there are a few standard guidelines you can follow to simplify things. We sought input from a few experts in the field, including the International Franchise Association (IFA), to learn the basics of the RFP process. Here is a quick overview of the steps to follow when planning, writing and evaluating your next Request For Proposal.

Step 1: Determine if you actually need an RFP

Before doing anything else, take a hard look at your needs and ask yourself if a full-blown RFP is needed to reach a solution.

“A common mistake is to send out an RFP because it seems easier than sitting through sales pitches or because people say it’s ‘good form,’” said Casey Enstrom, a staffing industry consultant. Often a more effective approach is asking prospective vendors to give presentations, online or in-person. This approach works best if you already have a narrow list of vendors you’re comparing from the outset. Then, after the presentations, issue a Request for Quote (RFQ). “At that point, you’re just talking about pricing,” he said. “An RFP isn’t needed; you’ve seen everything you need to see.”

However, the RFP does make sense in certain scenarios. For instance, if your company needs to acquire new accounting software or find a printer for specialty publications. In these instances, RFPs will let you compare responses and vendors objectively.

Step 2: Clearly define the roles

RFPs require the collaboration of numerous stakeholders, so ensuring everyone knows their role is a must. While the key players will vary depending on your needs, there are a few consistent figures beyond the business stakeholders.

• A consultant should be called upon to help you express your company’s needs within the RFP. They can also help select qualified vendors, assess their credentials and manage communications.
• The procurement manager will work with internal team members and coordinate the creation of the RFP. They’ll help clarify your company’s challenges and identify potential solutions. They’ll also make the initial request to vendors and monitor progress.
• The company CFO can help evaluate costs and ROIs to determine, among other things, whether a solution is viable.

Step 3: Make Sure Your RFP includes the basics

While RFPs should be customized to fit the project, every proposal should feature some essential elements.

• Share background details about your company, processes and needs
• Offer specific parameters for the services and products you’re seeking
• Outline the project’s scope, objectives and proposed budget
• Include a timeline, submission instructions and evaluation criteria
• Include details questions about the vendors and solutions.

Ideally, you want to keep the number of RFP questions as low as possible to simplify the process both for you and vendors. For a detailed look at the type of questions to ask your stakeholders and prospective vendors, check out this post from RFP360.

Bonus tips

You could write an entire series on RFP composition tips and never run out of material. But in the interest of brevity, here are a few things to keep in mind that you might not have considered.

• Don’t downplay discovery. Make sure you invest time upfront in stakeholder discovery by conducting interviews. Their insights will help you narrow your focus and compose a concise RFP. 
• Customize your templates. Experts advise against using one-size-fits-all templates, insisting it’s worth the effort to customize all RFPs. Remember, any irrelevant or dated information that lingers in your RFP template is often a red flag for prospective vendors.
• Share your scoring criteria. Transparency can go a long way on RFPs. You can clarify your priorities by disclosing how each proposal section will be weighed and scored. Vendors can then tailor their responses more directly.
• Set a process and see it through. After sending out RFPs and receiving vendor proposals, the next logical steps are to identify a shortlist of finalists and begin a more in-depth evaluation. Once a winning vendor is selected, you’ll need to create a contract that includes, among other things, performance metrics and review processes.
• Stay updated and adaptable. The last few years have seen significant shifts in how RFPs are delivered and who ultimately responds. That shift will continue as RFPs become more tech-focused, data-driven and collaborative. Therefore, staying current on industry trends and adapting when needed will be the key to crafting successful RFPs of tomorrow.