By Safock Procurement Research Team9 min read
Put a 24-restaurant group through our Maverick Spend Calculator with its standard restaurant inputs and it reports $1.8 million a year leaking out through maverick spend. Most of that money never appears as a higher price on an invoice. About $988,000 of it is the cost of handling roughly 28,000 small orders a year that went around the purchasing process, which works out to about 23 stray orders per restaurant every week.
That second number is why maverick spend is hard to see from head office, and why it keeps growing after a policy memo goes out.
Maverick spend is money spent outside the buying process an organisation has agreed. It covers three things: buying from a supplier that isn't on contract, paying more than the contracted price, and skipping the approval or purchase order the policy asks for.
In a single office it is a nuisance. In a business with dozens of sites it is structural, because every site has its own manager, its own emergencies and its own nearest cash-and-carry.
Head office rarely sees the moment it happens. These are the usual patterns in multi-site operations:
None of these people are trying to waste money. Each purchase is small and reasonable on its own. The cost comes from the number of them.
Most multi-site businesses look for maverick spend after it has happened, in three places:
All three are records. None of them is in the way at the moment someone decides how to buy, which is the only moment the decision can be changed.
Maverick spend has two costs: the discount you didn't get, and the extra work each off-contract order creates. Work it out per category, because compliance and discounts vary a lot between, say, food and repairs.
For each category:
Leakage = price premium + processing cost. Add up the categories for the total.
Take repairs and maintenance in the example below. The group spends $2,592,000 a year on it and 40% of that goes through contracts, so $1,555,200 is off contract. The contracted rates would have been 16% lower, a premium of $248,832. At an average of $220 per order, that off-contract spend is about 7,069 orders, and at $35 of extra handling each (chasing receipts, coding, approving after the fact, querying invoices) that is another $247,418. The category leaks $496,250 a year.
The group has 24 restaurants, each spending $900,000 a year on supplies, so $21.6 million in total. Across all categories, 71.2% of that spend goes through contracts.
| Category | Annual spend | On contract | Off contract | Missed discount | Leakage a year |
|---|---|---|---|---|---|
| Food and beverage | $13,392,000 | 82% | $2,410,560 | 9% | $600,449 |
| Disposables and packaging | $2,592,000 | 70% | $777,600 | 14% | $232,573 |
| Chemicals and janitorial | $1,296,000 | 60% | $518,400 | 18% | $175,785 |
| Smallwares and equipment | $1,728,000 | 45% | $950,400 | 15% | $293,760 |
| Repairs and maintenance | $2,592,000 | 40% | $1,555,200 | 16% | $496,250 |
| Total | $21,600,000 | 71.2% | $6,212,160 | $1,798,817 |
That is $74,951 per restaurant per year, or $1,441 per restaurant every week: enough to notice on a site P&L, small enough that no single month looks wrong.
Food and beverage is 62% of spend and 33% of the leakage, because it is already well contracted. Repairs and maintenance is 12% of spend and 28% of the leakage. Smallwares is 8% of spend and 16% of the leakage.
Procurement teams naturally spend their effort on the biggest categories. The leakage sits in the categories that are bought urgently, in small amounts, by people whose job isn't purchasing.
Split the $1,798,817 by cause:
This conclusion depends on the handling cost. Processing outweighs the price premium whenever each off-contract order costs more than about $28.70 to handle in this example. If your team spends less time per stray order, the price premium is the bigger half. Either way, counting only the price difference understates the problem.
The calculator also projects three years with spend growing 4% a year and compliance slipping 2 points a year, which is what tends to happen when nothing enforces the contract. Leakage rises from $1,798,817 in year one to $1,993,733 in year two and $2,201,365 in year three.
If every category were held at 95% compliance instead, year-one leakage would be $295,586. The difference, $1,503,230 a year, is what the calculator reports as recoverable.
Change the business type, number of sites and spend per site. The estimate uses the same maths as the full calculator; open the full version to set your own category mix, compliance rates and discounts.
Quick estimate · same maths as the full calculator
Uses the restaurant group presets for category mix, compliance and discounts. Change those in the full calculator.
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Maverick Spend Leakage Calculator
Set compliance and discounts per category, compare the status quo with an enforced target over three years, and download a board-ready PDF brief.
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Each common fix acts at a different point. The question that matters is whether it changes what happens before the money is spent.
| Approach | Acts before or after the purchase | Catches price drift from approved suppliers | Copes with a genuine emergency |
|---|---|---|---|
| Written purchasing policy and training | Before, if remembered | No | Depends on the person |
| Purchasing cards with merchant-category blocks | At the point of payment | No | Yes, within card limits |
| Approved-supplier list in the ERP | After, when the invoice arrives | Only if invoices are checked against contract prices | Usually bypassed |
| Quarterly spend analysis | After | Sometimes, with effort | Not applicable |
| Site requisitions limited to the contracted catalogue, with routed approvals for anything else | Before | Yes, when the PO carries the contract price and invoices are matched to it | Yes, through an approval route |
Cards and policies help, and most businesses should have both. Only the last approach puts the contract between the site manager and the purchase, which is where the decision is made.
Some off-contract buying is the right call. A burst pipe at 11 pm needs a plumber, not a requisition. A new menu item may need a supplier the contract doesn't cover yet. The goal is for every off-contract purchase to be a decision someone can see and explain, and for routine items to stop being bought that way out of habit.
Maverick spend is money spent outside the buying process an organisation has agreed: with a supplier that isn’t on contract, at a price above the contracted one, or without the approval or purchase order the policy requires. It is also called rogue spend or off-contract spend.
A kitchen manager runs out of fryer oil on a Friday night and buys four cases at a cash-and-carry on a personal card instead of ordering from the contracted distributor. The oil costs more, the receipt arrives weeks later as an expense claim, and someone in accounts has to code it by hand.
For each spend category, multiply total spend by the share bought off contract to get off-contract spend. Multiply that by the contract discount you missed to get the price premium, then add the extra cost of processing each off-contract order. Sum the categories for the total.
There is no universal benchmark, and published figures vary by source and industry. A practical approach is to set a target per category: food and core supplies can usually be held close to full compliance, while repairs and emergency purchases will always run lower. The Maverick Spend Calculator lets you set a target and see what reaching it would recover.
No. A burst pipe or a broken walk-in fridge needs fixing tonight, and the policy should allow for it. The aim is to make emergency buying visible and approved after the fact, and to stop routine items being bought off contract out of habit.