Exclusivity deals from suppliers can seem attractive due to better prices or payment terms. But they limit your flexibility and can make you vulnerable to price increases. Most operators who sign these deals regret it within 18 months.
What does exclusivity mean for your purchasing?
An exclusivity contract means you buy certain products from only one supplier. In return, the supplier often offers benefits like discounts, free delivery, or better payment terms.
? Example:
Your meat supplier offers exclusivity for all your meat with an 8% discount on your current prices:
- Current meat purchasing: €3,500/month
- Savings with 8% discount: €280/month
- Annual savings: €3,360
But: you lose the ability to buy from other suppliers.
Calculate the real costs of exclusivity
Exclusivity has hidden costs that go beyond just the price per kilo. You'll lose negotiating power and flexibility. After managing kitchen operations for nearly a decade, I've seen too many operators get burned by suppliers who jack up prices once they've locked you in.
⚠️ Watch out:
Suppliers often raise prices after the first year of an exclusivity contract. You'll have no alternative then.
Do a cost-benefit analysis with these factors:
- Direct savings: discount × monthly purchasing
- Price increase risk: what if the supplier asks for 15% more next year?
- Quality risk: what if quality declines?
- Supply risk: what if there are problems with one supplier?
Alternative negotiation strategies
You can often get similar benefits without full exclusivity. Try these alternatives instead:
? Negotiation example:
Instead of full exclusivity, ask for:
- "Primary supplier" status (80% of purchases from them)
- Discounts with minimum monthly orders
- Annual contract with fixed prices (no exclusivity)
- Volume discounts without binding exclusivity
When exclusivity can make sense
Exclusivity isn't always bad. In certain situations it can be beneficial:
- Large cost savings: more than 10% discount on major cost items
- Unique products: specialties that only this supplier has
- Excellent service: reliability and quality are crucial for your concept
- Short contract duration: maximum 1 year, with notice period
⚠️ Watch out:
Never agree to exclusivity contracts longer than 2 years. The hospitality market changes too quickly.
Keep control of your purchasing costs
Accepting exclusivity or not, keep monitoring your purchasing prices. Check monthly to make sure you still have a good deal.
Food cost tracking systems immediately show the impact of price changes on your cost per dish. That way you quickly notice if exclusivity becomes more expensive than expected.
How do you evaluate an exclusivity request? (step by step)
Calculate the direct savings
Multiply the offered discount by your monthly purchases from this supplier. This is your maximum benefit per month.
Inventory your alternatives
Make a list of at least 2 other suppliers for the same products. Check their prices and terms as a backup.
Set conditions on the exclusivity
Negotiate contract duration (max 1-2 years), price guarantees, quality requirements, and notice periods before you agree.
✨ Pro tip
Negotiate a 6-month trial period with monthly performance reviews before signing any exclusivity deal. This gives you enough time to test their service, delivery reliability, and quality without getting locked into a long-term commitment.
Calculate this yourself?
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Frequently asked questions
Can I exit an exclusivity contract if prices get too high?
What if my supplier threatens to stop if I don't give them exclusivity?
How long can an exclusivity contract last at most?
What do I do if my exclusive supplier runs into delivery problems?
Sources consulted
- EU Verordening 852/2004 — Levensmiddelenhygiëne (2004) — Official source
- EU Verordening 853/2004 — Hygiënevoorschriften voor levensmiddelen van dierlijke oorsprong (2004) — Official source
- EU Verordening 1169/2011 — Voedselinformatie aan consumenten (2011) — Official source
- NVWA — Hygiënecode voor de horeca (2024) — Official source
- NVWA — Allergenen in voedsel (2024) — Official source
- Codex Alimentarius — International Food Standards (2024) — Official source
- FSA — Safer food, better business (HACCP) (2024) — Official source
- BVL — Lebensmittelhygiene (HACCP) (2024) — Official source
Food Standards Agency (FSA) — https://www.food.gov.uk
The HACCP standards shown in this application are for informational purposes only. KitchenNmbrs does not guarantee that displayed values are current or complete. Always consult the FSA or your local authority for the latest regulations.
Written by
Jeffrey Smit
Founder & CEO of KitchenNmbrs
Jeffrey Smit built KitchenNmbrs from 8 years of hands-on experience as kitchen manager at 1NUL8 Group in Rotterdam. His mission: give every restaurant owner control over food cost.
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