by: kleinbl00

comment by
cgod
badged comment
cgod  ·  link  ·  parent  ·  post: The Absence of Olive Gardens

Just a brief aside on the chain restaurant business model.

They buy nothing from Sysco. There is one business that owns the restaurant side and another that owns the distribution side. They are owned by the same guys. For all I know there might be a third that manufactures the slop.

Sysco can't provide the the consistency or the product that these stores need at a price they will pay. All the sauces come in jugs, cans or in frozen packets, the sauces are only for that chain. The cooks might need to rehydrate them.

The meat products are easy to handle and perfectly uniform having no variance in size or shape. Sysco dumps garbage on its customers with regularity, changes distributors or what ever it can to make an extra dime, wider variation in size of proteins or a different precooked burger than before. Sysco tells you that you are wrong and their shit is great, deal with it or call FSA.

Chains get exactly what they want at a competive price. The sauce is always the same because it's in the same 200 gallon batch by the same guy every time.

When a chain wants to expand they lower distribution prices and a franchise looks great profit wise. When a chain wants to boost it's stock price it tightens up costs on the distribution side and buys back a few of the franchises that it's stressed out with higher prices.

The chain sets the price on the menu and it sets the price of distribution. It makes all the profit on wholly owned stores, it makes all the money on distribution, it makes it's franchise fee.

A chain can raise distribution fees to lower store profits so that managers can't make their performance goals if they think too much money is going out in bounuses.

I've worked for franchises that were buying higher quality ingredients for a lower price to boost product quality and profits. Mixing three bags of franchise cheese with one bag of better cheese and making sure that the good shit was hard to find in the walk in just in case there was a cooperate inspection. It's the stuff lawsuits were made for.