How to Maintain Inventory for Your Franchise - dummies

How to Maintain Inventory for Your Franchise

By Consumer Dummies

Your franchise training manuals teach you all about maintaining your inventory. Procedures vary widely, depending on the type of franchise you own. Your franchise may not even have any inventory, and in that case, this is information you won’t need.

Back of the house

The back of the house is also known as the stockroom. It’s literally in the back area of your business, and it’s where you keep all the items not currently in use. If you need more vitamins, you go to the back of the house — or the back room or stockroom — and get them.

Back of the house is also where you store perishables or frozen items, which means that it can also be the location of a refrigerator or freezer. You’ll be expected to know what you have in the back, too. But again, franchisors already do a lot of the work by providing a plan‐o‐gram for the back of the house, just as they do for the front.

Your franchisor should provide detailed back‐of‐the‐house storage procedures. Follow them. If your franchisor doesn’t provide information on back‐of‐the‐house arrangements and procedures, here are some procedures to consider.

Dry storage practices

Dry storage is a term used for items that don’t require refrigeration. If you’re a health food franchisee, your vitamins and sports drinks are both dry storage items. The following are some dry storage practices:

  • Store products at least 6 inches off the floor on clean, nonporous surfaces to permit the cleaning of floor areas and to protect from contamination and rodents.

  • Don’t store products under exposed sewer or water lines, or next to sweating walls.

  • Store all poisonous materials — including pesticides, soaps, and detergents — away from food supplies, in designated storage areas.

  • Store all open packages in closed and labeled containers.

  • Keep shelving and floors clean and dry at all times.

  • Schedule cleaning of storage areas at regular intervals.

  • Date all merchandise upon receipt and rotate inventory on a first‐in‐first‐out basis (place the oldest products in front of the newly received merchandise).

  • Locate most frequently needed items on lower shelves and near the entrance.

  • Store heavy packages on low shelves.

  • Don’t store any products above shoulder height.

Refrigerated storage practices

If you have items needing refrigeration, place them into your cold storage as soon as you can. Here are some tips for storing your refrigerated items:

  • Enclose any food or other product removed from its original container in a clean, sanitized, covered container and properly identify it.

  • Don’t store foods in contact with water or undrained ice.

  • Check refrigerator and freezer thermometers regularly.

  • Store all foods to permit the free circulation of cool air on all surfaces.

  • Never store food directly on the floor.

  • If you’re a business that needs to store products under refrigeration, make certain that the temperature setting is appropriate for the product.

  • Schedule cleaning of equipment and refrigerated storage at regular intervals.

  • Date all merchandise upon receipt and rotate inventory on a first‐in‐first‐out basis (place the oldest products in front of the newly received merchandise). Doing so is particularly important with refrigerated products because their shelf life is usually short.

  • Establish preventive maintenance programs for equipment.

Front of the house

The front of the house is everything that’s not the back of the house. This is the area that customers see when they enter your store. Obviously, how the front of the house looks is more important for locations that are frequented by customers and less important for locations that customers never see.

If you’re a retail location, you will handle your merchandise differently than if you were a restaurant. Still, at all times, the front of the house is your showcase — it’s what customers see every time they visit your store.

Retailers need to place merchandise on shelves so that it’s attractive to customers and induces them to buy. Restaurants and other businesses that sell food also need to keep their locations attractive. If you have reach‐in refrigeration accessible to your customers, or if you have items on display, how you display them is just as important to you as it is to a retailer. Your franchisor should provide you with a plan‐o‐gram for that purpose.

In order to keep the front of your store in tip‐top shape, make the following a priority:

  • Follow your system’s plan‐o‐gram.

  • Keep your shelves and merchandisers (displays for your merchandise) stocked, clean, and dust free.

  • Use proper product rotation by placing the oldest product in front of the newly received merchandise (first‐in, first‐out).

  • Price identical items the same. One benefit of modern point‐of‐sale technology is that you don’t have to reprice each item when prices change — all you have to do is change the price in the computer and on the shelf’s price tag.

  • Allow adequate space between displays, as required by your local code.

  • Use only signage that is acceptable in your system. If your franchisor requires you to use professionally prepared signage, don’t use hand‐written signs. As important, make sure to keep your signage current. (Remove the Christmas posters before Labor Day!)

  • Keep your floor area free of empty boxes, unless they’re part of your design concept.

The Americans with Disabilities Act requires that you keep your store arranged in a manner that makes it usable for individuals with disabilities. As a general rule, provide enough space for easy passage of a wheelchair throughout the store, make certain that the lines to your registers are accessible, and don’t display merchandise in a way that makes it difficult for people with disabilities to shop.

If you have no choice about how you merchandise the store, make certain that your staff is actively available to any customers who may need assistance. Remember, complying with all federal and local laws is the franchisee’s responsibility.