When Should Restaurants Start New Partnerships or Change Vendors

Changing vendors, suppliers and consultants in the restaurant business often solves some problems while creating a host of new difficulties. Weighing the pros and cons of new technologies, marketing solutions, local and regional suppliers and new contract terms often proves difficult for busy restaurant managers who have little time to perform due diligence before committing to change. Salespeople hound restaurant managers and owners with wholesale foods, trendy products, marketing ideas, technology upgrades and restaurant supplies. Trying new ideas or changing vendors, consultants and partnerships carries risks, so organizing a systematic method of investigating how a restaurant makes changes could prove enormously beneficial.

Assessing the Risks

Prices alone don’t always justify changing reliable suppliers. A restaurateur could easily change suppliers to discover that the new vendor has poor service, questionable finances, ordering restrictions, insufficient stock or delivery difficulties. Marketing ideas might produce limited results or generate business only when the restaurant is solidly booked. Cooperative advertising deals might result in scams or surrendering too much control, so consider change carefully.

• Look within the operation to see whether problems can be handled with negotiation or by assigning new duties in-house.
• Hire a consultant only when there are well-defined and measurable goals to achieve.
• Remember that internal investigations often fail to achieve true objectivity.
• Restaurant consultants  are generally unregulated, so be aware of the risks.
• Shop around before committing to change, and consider using more than one partner to achieve each business goal.

Best Practices for Reviewing Proposals

Yearly bidding might prove untenable in the wildly fluctuating food industry, so consider reviewing prices at least four times a year. Restaurant managers can then give their sales reps opportunities to deliver better prices or quality because suppliers seldom provide the best prices without client pressure. By working this closely with sales reps, managers will encourage them to find better deals and ways of saving money.

Changing the Guard or Hiring New Partners

Changing suppliers or hiring new services and consultants often proves to be the best solution, but remember the following precautions:

• All vendors promise the best quality, price and service, but major differences are relatively rare.
• Validate the supplier, vendor or consultant by checking references, online information and business complaints.
• Show any complicated contracts to an attorney before signing them.
• Choose experience and service over distance.
• Never hire a consultant unless he or she has owned a restaurant or had extensive business experience in the field.
• Check all aspects of the service or product line before buying, and ask for samples or trial periods before committing to a business relationship.

Supply Chain Risk Management

Restaurateurs now seek local suppliers and sustainable foods to satisfy consumer demand for local accountability, but just hiring a local supplier doesn’t guarantee any of those benefits. Always evaluate the products, service, delivery logistics and supplier background. Ask for a written contract and the supplier’s policies about notifying clients about price increases. Find out which other restaurants the company supplies and whether these include similarly sized operations or local companies. Ask for references, and follow-through by investigating all references, claims of experience and sales promises.

In the restaurant industry, change has become important to get the best prices, take advantage of new marketing options and deliver the latest food trends to increasingly demanding diners. Restaurateurs run risks every time they change suppliers, start new lines of service or authorize promotions, so develop a plan to manage change and limit risk. Studying the restaurant’s needs, looking for alternative solutions and investigating new business partners and contracts helps to prevent jumping out of the sauté pan and onto the flaming charcoal-broiler.