Ken Cole, CEO, Quaker Steak & Lube Franchising Corp., Sharon, Pa.

We look to existing suppliers to buy as much product as we can. An example: We buy [one company's] ketchup, yet we were buying a marinara sauce from another company and soups from another company. So we said, “What if we combine and use your soups and your marinara sauce along with your ketchup? Since we're buying multiple products, how can you then reduce the price of the ketchup, for example, which we use a lot of?” So that way you have fewer suppliers you're buying more items from or fewer manufacturers that you're buying more items from. And then by using that leverage, they'll typically give you a better price.

We've teamed up with a gross purchasing organization. They go out and get a lot of small companies like ours and put them all together, and we all get to share in purchasing power as large companies do. They look for like products amongst the brands. So let's say they have 10 small brands, but we're all buying one brand of mayonnaise. We get that purchasing power. So that has helped us out.

Bridget Sutton, president, Baja Sol Restaurants Group, Inver Grove Heights, Minn.

We consolidate our purchases with all of our franchisees at the same time. So for example, on uniforms. We reached an agreement with a vendor to warehouse large quantities of uniforms for us. And then that means we can order 600 shirts at a time, driving down the price per shirt. And we and our franchisees can just buy them as needed rather than laying out a bunch of cash upfront.

Consolidating purchases with all of the units together really does help keep costs down. If you can get your franchisees to agree to use the same vendor to get that best price, a lot of vendors, especially in today's market, are willing to go the extra mile to keep your business.

We really develop a strong relationship with the vendors we do choose. And we work with them on sourcing ingredients, sourcing materials, really streamlining that distribution process to cut down costs. And then if we can piggyback on a larger order that they use for somebody else perhaps, then we look at that. So if we're using a cut of meat, for example, that a much larger chain is using, we'll talk to the vendor and say, “Since you've already got 40,000 pounds of this coming in per week, can we piggyback on that?” And we're adding 5,000 pounds a week to that big order to get the same price.

John Clay, CEO, Bread and Company, Nashville, Tenn.

We've reduced our food cost this year by 3.5 percent by more effectively managing our waste and having better tools for managing our internal ordering process. And we've done that by implementing some software that predicts what our usage is going to be. And that's really helped us to get much better control over what our inventory levels need to be. It does the work for us in analyzing the last six Mondays vs. the upcoming Monday. So getting that information in a timely manner and having the algorithms that are in the software do the math for us has really reduced the amount of time that our managers sit in front of their computer trying to figure out what their order needs to be for the upcoming day or two. And it's resulted in much more accurate ordering so that we sell out things less frequently and waste less.

Randy Murphy, president and CEO, Mama Fu's Asian House, Austin, Texas

It's not really just trying to get a lower price from our purchasing mechanism. But for us it's also looking at preparation and things within the store.

Maybe it's a sliced protein. Should we consider getting it unsliced and slicing it ourselves? That's one of the big costs reducers that we implemented this year. All of our proteins are fresh, but we stopped having it presliced and we saved a tremendous amount of money. So we're able to look at the type of product we get in, thereby lowering our purchasing cost tremendously.

We also did that with some of our napkins. We have a very high-quality napkin. We found lots of time people would grab a stack of napkins, put them on their table, use one of the four they grabbed, and then we have to throw all of them away. So what we decided was, hey, let's pre-roll those, thereby increasing the sophistication and have them available on the tables already. We implemented that about a month ago, and we've seen a significant drop in paper costs.