Are chain restaraunts obligated to get all their food from a supplier?

I was reading in another thread about chicken places running out of chicken, burger places running out of burgers, donut places running out of donuts, and it made me remember. In those cases it was a very specific product that could pretty much only be restocked by a supplier. (BK burgers, Tim Horton’s donuts) What about pretty generic stuff?

We had gone to a Friday’s that had been open for only a few days around the corner from my house. It was part of a new plaza that had just opened. My FIL ordered coffee but was told they were out of cream and were waiting on the supplier. They were also out of, I believe, green beans.

Now there is, in this plaza, pretty much next door, both a Wal-Mart and a Sam’s Club. Waiting on a signature menu item I could see, but cream? There are an awful lot of coffee drinkers and many use cream. I think there are mixed drinks that use cream. Cream is pretty generic.

So were they obligated by contract to wait to get ALL their supplies from the distributor? They can’t pop next door, in a pinch, for things such as salt, straws, croutons, etc? Or is it more a matter of money? Did they already pay for the stuff coming and therefore not have the funds to buy extra?

I can only speak from a hotel-perspective…

We do have ‘preferred’ vendors with whom we have negotiated procurement rebates and special prices and thus should be used predominately. The kitchen has access to ‘petty-cash’ though which they can use to buy generic items if they manage to run out of them - eggs, milk, cream, vegetables, etc.

Petty Cash can be a tricky area to keep control over especially when dealing with non0-finance oriented people so I can see why certains chains would not allow this practice. It could also that at the time no manager was available to give out petty-cash to buy the creams/egs/milk/etc…

Because of the volume purchasing and streamlined distribution it’s almost always cheaper to go with the chain’s purchasing department. Some franchise agreements probably mandate it too.

A lot of franchises impose mandatory legal requirements only to get supplies from the approved supplier/franchiser. The penalties are very harsh - including withdrawal of the franchise and loss of all investment therein. (See Fast Food Nation’s section on Subway.)

Similar example: my friend in the UK ran a pub which he leased from the brewery*. One requirement of the lease was that he only bought beer from the brewer - who charged it to him at a whopping premium. When he realised he was a few weeks away from bankruptcy, he started ignoring them and ordering from whomever he liked. They threatened to sue for breach of contract, but gave up when he went bust.

*While I won’t say which brewery, UK beer drinkers will probably be able to guess if I tell you that they are a bunch of utter, utter bastards hiding behind a real ale brand, who crowed about my friend’s bankruptcy because it allowed them to increase the ground rent for the next unlucky sucker they were about to bleed dry. Appropriately, an anagram of their name would include the word “renege”.

Ah yes, if I’m guessing correctly it’s based in Bury St. Edmunds and among customers of this company, which installs gear to measure the flow of beer and compares the data with scheduled shipments so pub owners can know who’s cheating and buying beer elsewhere.

McDonald’s requires that you buy every last little thing from them, right down to the window cleaner. If you ever see someone cleaning in a McDonald’s, check out the supplies. The little spray bottle has the logo on it.

Last year I found a packet of McDonald’s laundry detergent stuck in our washer.

:confused: How did…?

Too many questions to even articulate.

How did it get there? The washer came with the house; a McDonald’s employee must have used it at some point.

How did such a product come to exist? I have no idea.

Some of the Little Caesars in northern MI lost their franchises a few years back for buying from unauthorized suppliers. I don’t have a cite, as I read about it in a print newspaper (remember those?) but can tell you the one in Petosky remained open but changed names to Spicy Bob’s.

Not exactly correct - McDonald’s doesn’t make any of the stuff that carries its brand. Suppliers make products to McDonald’s specification. And stores don’t buy anything from McDonald’s. Here in Australia just about everything is bought through FJ Walker Foods.

McDonald’s talks about having getting operational excellence through the “three legged stool” - those legs being the company, the franchisees, and the suppliers all working in partnership.

The only payments a franchisee makes to McDonald’s are rent and royalty payments. There’s also an advertising contribution, but again, it doesn’t go to McDonald’s, it goes to the advertising agencies/media agencies.

Former Starbucks employee checking in to share that yes, I’ve purchased several gallons of milk at the grocery store when our store ran out shortly before the dairy delivery. It’s not something you want to do often, though, as it really cuts into the profits. We didn’t pay half as much for the milk that was delivered as we did in the grocery.

I can only speak to decades ago, but if you ever take a look around a McDonald’s you will notice that people who work the grill and fryer line wear aprons, if you look a little closer you will also notice kitchen towels that are usually soaked in a proprietary McDonald’s sanitizer solution (comes dried, in packets similar to the laundry detergent-added to water.) that are used to clean nearly all surfaces in the Restaurant (Got time to lean, got time to clean). Well, the toweles and aprons got washed in a standard household washing machine in the back of the store with the McDonald’s laundry detergent. There was no dryer, however.

This is not entirely true, again, things could have changed in the many years since I worked there, but many of the cleaning supplies come in bulk, perhaps from McDonald’s Warehouses and supply channels, but they are standard industrial/commercial level and brands of cleaning solutions/supplies. That little spray bottle has the logo on it, true, but it is refilled periodically from gallon jugs of branded commercial/industrial window cleaner. Maybe Scot?

My first job was at a Dairy Queen, and I remember that the franchise owners used some “non-approved” supplies. They bought generic ketchup packets and napkins for the customers to use, but they kept a box of the “official” DQ ketchup and napkins in the back in case they knew they were going to get a visit/inspection from corporate.

Having worked in the supply end in inventory management, yes, contracts usually specify what must be purchased only from approved distributors.

In a nutshell, a distribution company contracts with Chain Restaurant Corporate to purchase to CRC specifications, recieve, warehouse, fulfill orders and deliver their product. Usually, they contract with whichever company who wins the bid in their region.

Some chains allow their franchisees to order some generic stuff from their distributor (which the distributor stocks because they service more than one CRC and many times, independents), but that is usually limited to things that the customer rarely or never sees and then, usually only in some of the smaller chains.

Other CRCs want everything down to the toilet paper to have their logo.

That said, any supplier with the capability of winning the bid usually is obligated to provide reasonable “hot shot” service in the contract. That minimizes time spent waiting for goods.

From an accounting perspective, it’s much easier to track the profit margins using one central distributor. Too much petty cash going out for emergency supplies or too many “hot shot” orders (which have an additional premium for delivery) will spur an audit of the books in a heartbeat.

It has extra strength grease remover to get rid of the french fry stink. More importantly you would need the body bath and hair shampoo. :slight_smile: I made all that up, but it’s logical. :wink:

QFT! We rented a room for a while to a girl who worked at McDonald’s. She smelled like french fry grease all the freakin’ time, even when her work uniform was freshly laundered and she was freshly showered!

As to the OP, yeah, by my experience, some places must buy only from approved suppliers. Hubby and I were eating in a chain restaurant some months ago (I want to say it was a Ruby Tuesday, but it could have been a TGIFriday’s or something), and he ordered a crab cake. He wanted tartar sauce to go with it (yeah, he’s a heathen like that:p ), and was informed they were out of tartar sauce. Out of tartar sauce??? Dude, there’s a supermarket next door. Send someone to get some! (That’s pretty much what he said to the waiter, but he was more polite about it), and we were informed, in no uncertain terms, that such things simply were not allowed. The tartar sauce they served had to be the same tartar sauce served at every Ruby Tuesday’s (or whatever). All the time.

As mentioned upthread, I’m sure there are franchises that have somewhat looser rules. But some of them are insane about it.

Of course, the upside to these rules would be: if you go to a chain restaurant, no matter what state you’re in, you know what you’ll get. A Fillet O’ Fish in Greenbow, AL, is going to taste exactly the same as a Fillet O’ Fish in Eugene, OR. That’s why people pay such insane prices to buy franchises; they’re getting all that guaranteed business from people who want to know what to expect.

As a counter example. one time I was at a Chili’s when their pop machine was down (out of CO2, maybe? I forget, point is it wasn’t working). They actually sent employees out to buy some two liters at the store.

There’s also legal reasons. I work for the customer service line at McDonald’s (and thankfully just got promoted out of having to deal with customers), and I would say I get maybe 3 or 4 calls about allergy/ingredient information. So if I tell someone the ingredients for our tarter sauce, and they end up getting a different tarter sauce and have an allergic reaction to it, you can bet they’ll be getting a huge payout.

That’s also why we don’t give out any information about non-core (optional/limited time/regional) products, because the ingredients can vary depending on what region you’re in.