Following the Recipe Brings Franchisees to the Table : A Case Study Consolidating Purchasing and Calculating Cost Savings at Franchisees

Abstract: Course: Degree Project in Supply Chain Management, the Business Administration and Economics Programme, 4FE19E Authors: Matilda Engblom and Katarina Nyberg Supervisor: Arash Kordestani Examiner: Helena Forslund Title: Following the Recipe Brings Franchisees to the Table - A Case Study Consolidating Purchasing and Calculating Cost Savings at Franchisees Background: As a franchisor, Company X does not have insight or control in purchasing at their franchisees. Spend analysis is a tool used to identify current purchased volumes and costs. An aim with spend analysis is to decrease the cost and analyse the spend. There are four different types of consolidation that can consolidate the current purchased volumes and create purchasing cost savings. They are article, volume, supplier and transport consolidation. However, identifying the current situation can be hard in the franchise concept and therefore hard to create purchasing cost savings. It is therefore of need for the franchisor to have insight and control over their franchisees in purchasing. Purpose: The purpose of this study is mainly to identify how the current purchased volumes can be consolidated to create purchasing cost savings for the franchisees of Company X in the Middle East. In addition, calculate the purchasing cost savings that consolidation could lead to. As well as, investigate how a franchisor can regain insight and control in purchasing over their franchisees. Methodology: This case study had a mixed research strategy of explanatory sequential design. Empirical data was collected by both unstructured, semi-structured and structured interviews. The analytical methodology was based on pattern matching. Confidentiality has been of great focus during the study for ethical considerations. Conclusion: The current purchased volumes and costs were identified, enabling different types of consolidation and calculations for purchasing costs. The consolidation model (Figure 28, p. 43) illustrates four different types of consolidation, article, volume, supplier and transportation, which should be followed. Lastly, Table 38 (p. 85) presents actions for regaining insight and control over franchisees.