Nurturing the Vendor-Operator Relationship

    When I look back at our best business relationships, they were forged on a personal level.

    Firehouse Subs CEO Don Fox.
    Firehouse Subs
    There is a lesson in this for suppliers to the restaurant industry, which is to understand the business model of your customer.

    I recently attended a couple of business conferences outside of my home town of Jacksonville, Florida. While some vestiges of the pandemic remained, the experiences were a world apart from life during the preceding 15 months. Until these events, I didn’t realize how much I missed seeing my friends from the industry. Jumping back into the social pool was refreshing. If the upcoming North American Association of Food Equipment Manufacturers show (NAFEM) is your first large gathering since the onset of the pandemic, I hope you experience the jubilant feeling that I did once able to outwardly smile, shake hands, and yes, hug some of the people you haven’t been face-to-face with for all too long.

    The feeling of reconnection is not reserved for my fellow operators. The vendor community that supports our industry has given birth to treasured relationships, some of which extend not just years, but decades. The bond is symbiotic, as no restaurant can exist without a network of suppliers and manufacturers. And the vendor community doesn’t simply keep the operation running; it propels the restaurant industry forward.

    Suppliers are often the architects of innovation; they sometimes see opportunities within the restaurant that have escaped the gaze of operators. However, vendors don’t work in a vacuum; collaboration with operators is a key ingredient for the modernization of restaurants. At Firehouse Subs, we have benefited immensely from supplier relationships that focused on innovation. Some of the projects involved were driven by the vendor needing an operator willing to be on the ground floor with them, while others stemmed from our search for a vendor willing to help us solve a problem (or exploit an opportunity) for which a solution didn’t exist.     

    MORE FROM DON FOX:

    The Value of Mentorship in the Restaurant Business

    Why You Should Never Stop Learning

    How COVID Clarified Fast Casual’s Past, Present, and Future

    Channels of Trade for Restaurants in the Post-COVID Era

    There’s Always Room for Another Great Restaurant

    Back to Normal in 2021? Not So Fast!

    The healthiest relationship between a supplier and the operator is one that creates a win-win outcome. Each should make a fair profit and respect the other party’s desire and need to do so. Transparency and fairness should permeate the relationship. As in all relationships, it is rare to always have smooth sailing, and the occasional rough seas are best navigated when the shipmates share common values … fairness being first and foremost among them.

    The real estate industry serves as an example of how a weakness in the vendor-operator relationship can be improved. During the Great Recession, many restaurateurs were hard-pressed to pay their rent, which forced landlords into conversations about concessions. It was fair for the landlord to expect transparency regarding the condition of the operator’s business, including an examination of their financial statements. Armed with such information, landlords could render a fair decision regarding concessions. The improved transparency paid dividends for several years after the recession. Landlords had a better understanding of their tenant’s business models, and this translated into better terms on new leases.  

    There is a lesson in this for suppliers to the restaurant industry, which is to understand the business model of your customer. This applies not only to knowledge of the broader industry, but to the individual brand you are pitching. As your potential customer, I can assure you that I immediately develop a sense of the degree to which you have done your homework. Those that put in the effort in advance have a far greater chance of getting their foot in the door. 

    This leads to a topic that I am sure resonates with every operator: the endless barrage of sales inquiries from a vast array of suppliers. I’ll begin with a foundational statement: I deeply respect that the sales team for every supplier is trying to build a business and earn a living. As a sign of that respect, I respond to every contact (if there are any exceptions out there, it was not intentional). Every great vendor relationship had a starting point, and if I didn’t leave the door open—if even just a sliver—I might miss a great opportunity for our business.

    I must confess, however, that the way some vendors make their approach is, in a word, disappointing. I can understand if a sales team is inclined to deploy tactics that they consider to be effective. However, many of these tactics are glaring in terms of their lack of personalization and/or failure to anticipate the needs of the operator. The most prevalent is the cold-call email. I imagine it works in the aggregate, or it would not be so pervasive. But from the perspective of someone who values due-diligence done by the vendor, they leave much to be desired. I can’t imagine that I am alone in receiving a significant number of these. Every. Single. Day.                    

    What works? When I look back at our best business relationships, they were forged on a personal level, with people who studied our business and formulated a compelling case for considering their product or service. It is not unusual for companies and people like this to add value to your business before you ever agree to do business.  

    The nature of the pandemic conspired against this approach. But now, with the return of events such as NAFEM, we have a chance to re-engage on a more meaningful level. Among the positive outcomes from the pandemic will hopefully be a reinforcement of the role that personal relationships play from the outset of the operator-supplier partnership.

    When you are at NAFEM, keep an eye out for the most visible, outward sign of the inherent power of these relationships: a hug between an operator and a supplier. I think you will see a few!

    Don Fox is Chief Executive Officer of Firehouse of America, LLC, in which he leads the strategic growth of Firehouse Subs, one of America’s leading fast casual restaurant brands. Under his leadership, the brand has grown to more than 1,190 restaurants in 46 states, Puerto Rico, Canada, and non-traditional locations. Don sits on various boards of influence in the business and non-profit communities, and is a respected speaker, commentator and published author. In 2013, he received the prestigious Silver Plate Award from the International Food Manufacturers Association (IFMA).