What Franchisors Look for in a Franchise Supplier

Suppliers are an essential resource for franchise brands. They are companies that help franchises grow and establish a sustained presence in increasingly competitive segments through proprietary technology and creative implementation of ideas. The best vendors are powerful innovators in their own right, operating at the forefront of the franchise industry due to a unique product and ability to contribute to the success of the overall franchise system. 

But what are some main factors franchisors are looking for when choosing a franchise supplier?

Mark Montini, chief marketing officer with Premium Service Brands, has a uniquely precise understanding of this topic as someone who has worked on both sides of the equation. Before joining multi-brand home services franchisor Premium Service Brand as a marketing leader, he was the founder and CEO of several franchise technology providers, including B2B SaaS digital marketing platform Promio and franchise management SaaS provider Naranga. 

“As a marketing leader, I can look at our relationships with vendor suppliers from their perspective because I was one myself for a long time,” said Montini. “For me, there are three priorities I look for in a vendor partner. The first one is capability. There are so many good suppliers out there, so it is not that difficult to find partners capable of doing what we need. That is a no-brainer.”

The other two priorities, Montini said, are the deciding factors. “The next priority is culture,” he said. “I am a big culture guy. I view our vendor partners as true partners. For them to be that, they must be aligned and complementary to our culture. The selection process is about understanding who they are and assessing if they will be a fit.” 

The last priority, Montini said, is strategic objectives. “One of the challenges I often run into is that suppliers have their strategy, but it's not aligned with ours,” he said. “From my days as a vendor, I always felt like I underserved clients who wouldn’t allow us to truly understand their strategic objectives and allow us to help with our product or service. When I choose a vendor, I show them our strategic objectives and ask them to explain how their company can align with our goals.”

Still, Montini says it is important to keep in mind that each franchisor will likely have different criteria when choosing suppliers. “Some franchisors are most concerned about price and capability — least expensive versus best value,” he said. “Others are looking for the best-in-class provider. They are not comfortable partnering with a mid-level marketing agency, for example, they want the best and are willing to pay a premium. There is certainly a benefit to that, but remember, best-in-class in an industry may not mean best-in-class for your system.”

As an example of how franchisors choose suppliers, Montini points to two vendor relationships he has cultivated since starting with Premium Service Brands: a digital marketing agency and a social media provider. 

“When I joined PSB, we had nine different digital agencies that worked with a variety of our brands,” said Montini. “There was no alignment with what we were trying to achieve and the programs they were running. So, I started trying to consolidate our digital marketing around one agency. I began conversations with about seven or eight agencies, and it was easy to tell what their capabilities and capacities were. My first conversations were really about digging into culture. Tell me about the non-negotiables and the vision for the company. We narrowed it down to three options and went to the proposal phase. I spent two or three hours with each of the three to give a presentation on our three-year marketing strategy, asking them to build a proposal on how their products and services could help us achieve that goal with greater velocity and success. From there, we picked the provider we felt aligned best with our mission.”

Montini says they did the same for the company’s new social media platform. “We needed some way to distribute our content, and plenty of social media platforms serve the franchise industry well. There were eight or nine that we started with; two were a culture fit. Then we went through the same process. We opened our strategic playbook — here is what we are trying to achieve. In that particular case, it was very obvious that one of them understood our goals, and it was an easy choice to make.”

Overall, Montini said the right supplier should benefit the entire franchise system, all the way down to the unit level. “If we are aligned with our vendor, the effectiveness ultimately benefits the franchisee,” he said. “In some cases, it may be lowering the cost, but most often it is about creating a better performance and a better return on investment.” 

For example, in the case of Premium Service Brands’ new digital agency supplier, Montini says the franchisor needed to have a better connection with the franchisees. “The digital world is overwhelming to franchisees and getting more overwhelming every day, so it was important from a strategy perspective to ensure franchisees felt they were more included in digital work,” he said. “Ultimately, the partner we chose understood that and built into the program a way to ensure our franchisees were better supported and more aligned with where we were headed digitally.”

A great supplier can be invaluable in helping a franchisor achieve their goals and ensuring franchisees are well-positioned for success. By focusing on factors like culture, strategy and capability during the vetting process, both franchisors and suppliers can be confident they are teaming up with the right partner from day one.