When you open a restaurant, you need to decide what your needs are according to the menu you serve, which in turn is going to determine the suppliers you use. In the past, that was fairly easy, because the supply chain was not as spread out in some respects, but was not so concentrated as in others. Prior to 1989, there was no US Foods, and Sysco did not have the reach it has today, so you were often given a choice of mostly local suppliers that numbered fairly low.
Nowadays, distribution has become more concentrated and the larger companies have a greater share of the food businesses. These companies will usually require delivery contracts for each location based upon each business’s size, needs, and financial standing.
But is this a bad thing or a good thing for restaurants? Are there advantages to dealing with suppliers like that? Yes, there are.
Below are five solid reasons why you might want to deal with a supplier that requires a contract.
- Guaranteed supply: When you sign a contract with a food supplier, you have a guaranteed supply of the products you need. This can be especially important if your business relies on a steady supply of specific ingredients or products.
- Price stability: A contract can also provide price stability, as you can negotiate the price and terms of the agreement upfront. This means you can avoid price fluctuations and unexpected costs.
- Quality assurance: A contract can include specifications for the quality of the products you receive, ensuring that they meet your standards and expectations.
- Relationship building: A long-term contract can help build a stronger relationship with your supplier, which can lead to better communication, greater trust, and potentially better terms in the future.
- Legal protection: Contracts can provide legal protection for both parties. They can include terms for delivery, payment, and other important aspects of the business relationship, which can help to avoid misunderstandings and disputes.
Now, of course, you must take this list with a grain of salt and the knowledge of your business. You may not ultimately be big enough to deal with a supplier such as one that requires contracts. Maybe you procure much of your stock from alternative suppliers, like Restaurant Depot and FreshDirect. If that is the case, then I suggest you keep an eye out for the next article where I will give reasons to go without a contract.