Understanding the Evolving Role of Distributors in QSR Equipment Supply
Traditionally, distributors in the food equipment industry have played a crucial role in supporting Quick Service Restaurant (QSR) operations. Their responsibilities typically include:
- Sales and order fulfillment
- Shipping and transportation
- Installation of equipment
- After-sales maintenance and service
- Inventory management and stocking
However, as QSR brands expand globally, their approach to purchasing, logistics, and service management can vary significantly depending on the market size and operational strategy. This, in turn, impacts the role of distributors. Below are the three primary procurement strategies adopted by international QSR chains and their implications for distributors.
Type 1: Direct Procurement from Equipment Manufacturers
Some large international QSR brands leverage their global buying power by purchasing equipment directly from manufacturers. In such cases, manufacturers typically offer a barebones price, which excludes shipping, transportation, installation, and after-sales service. While the standard manufacturer’s warranty covers parts, it does not include labor costs for repairs.
This strategy is more common in large markets where QSR headquarters can efficiently outsource logistics, installation, and maintenance to third-party service providers. A notable example is McDonald’s, which employs specialized kitchen equipment consolidators such as H&K and Franke to manage the procurement and integration of equipment from multiple manufacturers. These consolidators ensure that all necessary equipment is delivered to new store locations and oversee installation.
Type 2: Full-Service Distribution in Smaller Markets
In countries with smaller populations and market sizes, it is often not economically viable for QSR brands to separate equipment procurement from transportation, installation, and after-sales service. In these markets, local distributors play a comprehensive role by handling all aspects of the equipment supply chain.
Since no single distributor typically carries every product required by a QSR brand, customers in such markets often need to coordinate with multiple local distributors to source the necessary equipment.
Type 3: Self-Consolidation for International Expansion
When QSR brands expand into new overseas markets, they may struggle to find a local distributor that supplies the same equipment used in their home country. To address this, some QSR chains procure equipment from their existing suppliers in their home market and manage the consolidation and shipment themselves.
Upon arrival at the destination country, these QSR brands must contract local companies for installation and after-sales services. This approach allows them to maintain equipment consistency across their global operations while navigating regional distribution limitations.
Conclusion: Adapting to QSR Purchasing Strategies
For distributors, understanding these different procurement strategies is essential to align their offerings with the needs of international QSR brands. As purchasing models evolve, distributors should be prepared to:
- Offer flexible service packages to accommodate QSR brands that prefer direct procurement.
- Strengthen logistics and installation capabilities to support smaller markets where full-service distribution is necessary.
- Establish partnerships with global QSR chains to remain relevant in markets where brands manage their own procurement and consolidation.
By staying adaptable and responsive to these purchasing strategies, distributors can better position themselves as valuable partners in the global expansion of Quick Service Restaurants.