How to Set Up a Supply System Before Franchising Your Business

The purchasing practices of a successful business are not enough, on their own, to enable another entrepreneur to deliver the same quality. If the owner relies on personal contacts to find missing supplies or on day-to-day intervention to resolve delivery problems, the supply system is not yet ready to be replicated. Before establishing a franchise network in Türkiye, your aim should be to define clearly what each outlet will buy, from whom, on what terms and how it should respond when problems arise.

1. Categorise purchases by quality risk

The first step is to compile a single list of the products and services your existing business uses. Consider not just the products you sell, but also packaging, cleaning supplies, equipment parts and maintenance services. Record how each item affects the customer experience, safety and business continuity.

Then create three practical categories:

• Brand-defining supplies: Items that directly affect consistency, such as products made to a proprietary recipe or branded packaging.
• Supplies with critical technical standards: Materials that must meet specific requirements for durability, hygiene or equipment compatibility.
• Supplies that can be sourced locally: Products that can be defined by objective specifications and sourced from different suppliers without affecting quality.

This distinction allows you to build a supply structure with a clear rationale, rather than tying every purchase to a single source. Set verifiable specifications for each product, such as dimensions, composition, performance, shelf life or acceptable tolerances. Rather than referring to “quality deemed acceptable by head office”, use requirements that can be checked on delivery.

For packaging, for example, specify not just its appearance but also its leak resistance, temperature resistance and storage conditions. This ensures that the assessment of alternatives does not depend on personal preference.

2. Assess suppliers on capacity before price

A supplier that serves your existing business well may not be able to provide the same level of service to franchisees in different cities. When seeking quotations, look beyond unit price to delivery coverage, minimum order quantities, production capacity, payment terms and readiness for peak periods.

A supplier approval file might contain:

• The product’s technical specifications and, where required, conformity documentation.
• The results of sample assessments and the name of the person granting approval.
• The committed lead time from order to delivery.
• The remedy for incomplete, damaged or non-compliant deliveries.
• A contingency plan for capacity constraints and production interruptions.

Compare quotations on the basis of total delivered cost. Transport, storage, wastage, returns and cash tied up by minimum order requirements can make an apparently cheap product expensive. Allow for franchisees’ lower order volumes, particularly at the start; do not assume that everyone will benefit from the high purchasing volumes of the company-owned business.

Make it clear that approved supplier status is not a permanent privilege. Decide in advance how quality deviations, repeated delays or a lack of traceability will be assessed. The criteria should be specific enough for suppliers to understand what they need to put right.

3. Design purchasing obligations with competition law in mind

Türkiye has no comprehensive franchise-specific law governing franchise networks. Franchise agreements are generally treated as unnamed, mixed contracts. The relationship is governed principally by the Turkish Code of Obligations No. 6098, the Turkish Commercial Code No. 6102 and the Law on the Protection of Competition No. 4054. The Industrial Property Code No. 6769 is also important in relation to trade mark rights.

Supply arrangements require particular consideration of Law No. 4054 and the Block Exemption Communiqué on Vertical Agreements No. 2002/2. The franchise block exemption communiqué No. 1998/7 cited in older sources is no longer in force. Current assessments consider the scope of the agreement, the parties’ market positions and the restrictions imposed together; calling an arrangement a franchise does not automatically qualify it for an exemption.

Before requiring all products to be purchased exclusively from head office, assess the justification for that obligation in terms of protecting quality or know-how. Making approval of alternative suppliers subject to objective criteria may be a more workable solution. However, no approach in itself guarantees legal compliance.

Fixing a franchisee’s resale prices or imposing minimum prices carries serious competition law risks. Do not make recommended prices effectively compulsory through the loss of discounts, pressure over shipments or threats of penalties. Have a competition law specialist review purchasing obligations and pricing practices together.

Türkiye also has no mandatory, standardised pre-contractual disclosure document specifically for franchising, nor a general requirement to register franchise agreements in a dedicated register. Nevertheless, the principle of good faith and pre-contractual liability remain important. Do not conceal supply obligations or costs that could affect a prospective franchisee’s investment decision.

4. Make ordering, returns and financial interests transparent

Define clearly who places orders, who issues invoices and who handles claims if goods are damaged in transit. A model in which head office acts as the seller does not create the same responsibilities as one in which it merely recommends suppliers.

Prepare a short checklist for accepting deliveries. Link the product code, quantity, batch details where relevant, delivery date and photographs of any non-compliance to the same record. Set claim deadlines and return procedures in accordance with the applicable legal rules.

If head office receives rebates, commissions or volume discounts from suppliers, explain clearly to franchisees how these arrangements work. If you promise savings through joint purchasing, clarify how those savings are calculated and who retains them. Vague promises undermine trust across the franchise network.

5. Complete your disruption plan before the first franchise opens

Identify a second source or a temporary product alternative for critical supplies. Where no alternative exists, document the circumstances in which sales of the affected product must stop. Do not allow unapproved substitutes to put customer safety at risk.

Test the plan against a concrete scenario: the main supplier cannot dispatch an order. Who needs to be informed, how will available stock be checked and who will approve an alternative product? Where relevant, also assign responsibility for product recalls and customer communications.

Practical takeaway: Complete your product specifications, supplier approval criteria and supply disruption plan before signing the first franchise agreement. A robust supply system should maintain consistent quality without relying on the founder’s personal intervention.