How Franchisors Can Identify Use Of Unauthorized Products Or Suppliers in Their Franchisees

By Using Unauthorized Products And/Or Suppliers, Franchisees Will Start To Break Away From The Uniform System Standards Set By The Franchisor

By Content Writer
How Franchisors Can Identify Use Of Unauthorized Products Or Suppliers in Their Franchisees

One of the most important features of franchising is uniformity. Consumers should have the same customer experience, which includes receiving uniform products and services from any franchised location. By using unauthorized products and/or suppliers, franchisees will start to break away from the uniform system standards set by the franchisor. This will then lead to consumer dissatisfaction and will eventually tarnish the brand image.

For Instance, KFC sales in China plunged after it was reported that some poultry suppliers violated rules on drug use in chickens. KFC overhauled quality controls and eliminated more than 1,000 small poultry producers from its supply network.

Thus, Franchisors need to allocate appropriate resources, to monitor their systems and identify unauthorized and/or unapproved products. Some of them are listed below:

Inspect Franchise Location

One of the easiest ways to identify a franchisee’s use of unauthorized products is to have periodic inspections of the premises. In order to do this, however, the franchise agreement must clearly state that the franchisor has the right to inspect the franchised location.

It must set forth any key terms for inspections, such as their frequency or the areas that require inspection etc. Unannounced inspections are often the best way to understand the day-to-day customer experience, particularly in industries like food or hospitality.

Moreover, unannounced inspections limit the franchisee’s opportunity to remove or conceal the presence of unauthorized products or products obtained from unauthorized suppliers.

Document Request or Audit

Franchisors can identify several key “red flags” signalling the presence of unauthorized products by conducting an audit or document request. An audit can be conducted remotely or on site. Remote audits are generally less expensive for the franchisor, particularly for distant franchisees. Another red flag in an audit is finding supply orders that do not correspond with reported sales.

 If the franchisee has purchased an unusually low amount of approved supplies as compared to its rate of sales, this may be a sign that the franchisee is cutting corners by using cheaper, unauthorized products. But the franchise agreement must include a provision allowing for inspection of records at the franchisor’s request.

Customer Feedback

Customer feedback can help the franchisor manage several aspects of the brand experience. Franchisors can easily get to know about customer service and health and safety conditions in a particular franchise, as well as about the potential use of unapproved products.

Franchisors concerned about the use of unauthorized products should be alert to complaints related to products sold to customers that should not be offered by a franchisee. Multiple complaints about the same type of product from the same franchised locations may indicate that the franchisee is cutting costs by using an unapproved ingredient or an unapproved supplier of the ingredients.

One way for franchisors to solicit customer feedback is by offering rewards to customers who complete short surveys.

Comment
image
image
mobile
address
star franchise india
Related opportunities
  • Quick Service Restaurants
    About Us: Kathi Junction – brings the golden opportunity to start..
    Locations looking for expansion New Delhi
    Establishment year 2009
    Franchising Launch Date 2009
    Investment size Rs. 5lac - 10lac
    Space required 100
    Franchise Outlets -NA-
    Franchise Type Unit, Multiunit
    Headquater NEW DELHI New Delhi
  • Fire Fighting & Fire Protection Equipments
    About Us: We are a leading manufacturer of GFO Automatic firefighter...
    Locations looking for expansion Delhi
    Establishment year 2019
    Franchising Launch Date 2019
    Investment size
    Space required 300
    Franchise Outlets -NA-
    Franchise Type -NA-
    Headquater Delhi Delhi
  • Biker's Accessories
    Two wheeler market size of India is 18 million units..
    Locations looking for expansion Haryana
    Establishment year 2020
    Franchising Launch Date 2020
    Investment size Rs. 10lac - 20lac
    Space required 200
    Franchise Outlets -NA-
    Franchise Type Unit
    Headquater Gurgaon Haryana
  • Others Food Service
    About Us: Own the American Dream In India with U.S.Pizza! Since its..
    Locations looking for expansion Karnataka
    Establishment year 1998
    Franchising Launch Date 2002
    Investment size Rs. 10lac - 20lac
    Space required 250
    Franchise Outlets -NA-
    Franchise Type Unit
    Headquater Bangalore Urban District Karnataka
Insta-Subscribe to
The Franchising World
Magazine
tfw-80x109
For hassle free instant subscription, just give your number and email id and our customer care agent will get in touch with you
email
mobile
OR Click here to Subscribe Online
Daily Updates
Submit your email address to receive the latest updates on news & host of opportunities
More Stories

Free Advice - Ask Our Experts

pincode
;
ads ads ads ads