FeeHawk / Guides

Contract and locked prices: catching the quiet expiration

Many restaurants have a few items on a locked or contract price: fryer oil, chicken, a house cheese. When the agreement ends, the price usually goes back to the market or list price on the next invoice. Nobody calls you. The line just costs more.

Know what you actually have

• Ask your rep for the current list of items on contract or locked pricing, with the price and the end date for each. Get it in writing (an email is fine).
• Note the item number, not just the name. A substitute item number is usually not covered by the agreement.
• Put each end date on your calendar two weeks early.

How it shows up on the invoice

There is rarely a line that says the lock ended. What you see is:

• The same item number at a higher unit price from one week to the next.
• A different item number for what looks like the same product (the contracted item went out of stock or was discontinued, and the replacement is billed at the regular price).
• A change in pack size with the case price unchanged or higher, so the cost per pound or per each goes up.

The two-minute check

1. Keep your contract list next to the invoice when you review it.
2. For each contract item, compare the invoice unit price with the agreed price.
3. If it is higher, check the date: is the agreement over, or is this a billing error?
4. Write down the invoice number, item number, billed price and agreed price, and send it to your rep.

Questions to ask your rep

• Which of my items are on contract or locked pricing, and when does each end?
• If a contracted item is out of stock, is the substitute billed at the contract price?
• Will you tell me before a lock ends?

FeeHawk compares unit prices across your invoices and lists items whose price went up, including when the item number or pack size changed, so you can check each one against your agreement.