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.

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.

• The first priority 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 next priority is culture. 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 is strategic objectives. One of the challenges I often run into is that suppliers have their strategy, but it's not aligned with ours. 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. 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 choosing a digital marketing agency, Montini looked for an agency that could consolidate the company's digital marketing efforts and align with their mission.
• The selection process involved narrowing down the options to three agencies and then having each agency build a proposal on how their products and services could help achieve the company's marketing strategy.
• Ultimately, the agency that was chosen was the one that understood the company's goals and was able to build a program that would support the franchisees.

Montini says they did the same for the company’s new social media platform. They needed a platform that would allow them to distribute their content effectively, and they chose a platform that was a culture fit and understood their goals.

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. 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.

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.