Nobody could have predicted the present coronavirus epidemic and its economic effects, and if you’re a franchise owner, it’s likely that it’s completely upended your world.
Despite how difficult the current situation is, there are certain practical measures that franchise owners may do to assist themselves in survival.
To begin with, this is a wonderful time for franchisees to carefully review their P&L statement and look for any non-essential services that they don’t require or can do without. In prosperous times, you might have a monthly window washer or lawnmower come to your home. Perhaps you hire someone to sharpen your knives every two weeks.
What’s this? If there was ever a time to do those tasks without hiring a professional, it is right now. You can return to outsourcing these chores once the economy is back up and running, but for now, you’re just trying to survive.
Search for calm wherever.
If you have a lawyer, accountant, or marketing business on retainer, for example, call them and ask what they can do about monthly retainer payments. Can they adjust the agreement in any other ways, such as lowering the monthly payment? How can they help you?
You should also give your landlord a call to see what assistance they may provide. For instance, many landlords permitted April rent to be paid in installments over the course of the lease, rather than requiring it to be paid in full on the first of the month.
Even though your facilities are closed and no consumers are visiting your property who might sue you, do you still pay general liability insurance? Ask your insurance provider if they can waive your payments or give you credit for next month by giving them a call.
Making these calls shouldn’t even for a second cause you to hesitate, as nobody right now, including your vendors and service providers, wants to lose clients or get into legal trouble. They’ll be open to negotiating a solution with you.
Prioritize being creative
Franchisees should then examine their own businesses to determine if there are any innovative solutions to make the most of a challenging circumstance. Do you have a lot of merchandise and food that will go bad because you can’t transfer it? Give it to a neighborhood food bank or charity. It’s not only a kind deed; by writing it off, you could be able to lower your tax liability and gain favorable publicity for your company. Not a bad ROI for a lot of unsold products that would otherwise be thrown away.
Being creative also entails examining this situation to determine if there is a chance to find a novel solution to address the requirements of the populace. As an example of a competitive difference, several supermarkets have employed workers to clean shopping carts. Full-service gas pumping has been available at gas stations to spare customers from touching a possibly infectious gas pump or touchscreen.
What would be comparable in your industry that you could provide clients to increase their level of comfort and willingness to spend money with you? Perhaps it provides a contactless delivery or pickup service. Don’t be reluctant to “borrow” concepts from successful businesses or industries and then apply a modified version of them to your own venture.
Never lose sight of the fact that at some time, some lovely day not too far off, the pandemic will have passed, the lockdown will be lifted, and the wheels of the economy will start working once more as you concentrate on getting through this crisis. The moment to start planning your response during this ramp-up phase is right now.
That might entail reducing the number of seats in your dining room from 50 to 30, as certain states will have stringent social distancing laws in place for eateries once they start allowing companies to operate. Start making plans and getting ready for the following stage right away to be ready when your doors can finally swing open.
Seek assistance from the mothership
Your franchisor might be a helpful resource amid all of this bustle. They are, after all, specialists in how to use your notion and the various configurations or adaptations that might be made to it.
Any reputable franchisor will provide flexibility in the model’s operational options, allowing a franchisee to attempt something a little different. For instance, if you are a place where people go for lunch and dinner but there are now too many places trying to sell “to-go” lunch and dinner packs, you might want to try selling breakfasts instead. To generate original ideas and solutions, a constant two-way conversation between the franchisee and the franchisor is necessary.
Franchisees can benefit financially from the franchisor’s creativity. Consider that although your to-go business is still open, sales are down 40%. Your franchisor could be able to reduce your top-line royalty payment by 40% for the month of April. Alternatively, they might be able to temporarily exempt you from paying support fees or marketing royalties during the months when the crisis is still going on.
Your franchisor wants you to prosper and survive, and how they treat you will reveal who you’re doing business with within both the trying times we’re presently experiencing and the better times to come.
