11 Ways Franchisors Can Mitigate the Impact of the COVID-19 Crisis on Franchise Operations
Becky Martin, writer
Published at 12/04/2020, Updated on 04/05/2022 , Reading time: 5 min
The COVID-19 crisis is having a devastating effect on people across the globe. But one thing’s for certain, we’re all in this together. As a franchisor, it’s your job to protect your franchisees in this challenging time and mitigate the impact of the coronavirus outbreak on franchise operations. Today we show you how.
The COVID-19 crisis is altering the course of history. Businessowners are doing their best to keep their business afloat and employees safe and happy, and franchisors are trying to limit the damage the pandemic will have on their franchise operations and franchisees. If you would like some more guidance of how you can achieve the latter, keep reading to find out.
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1.The health and safety of your franchisees and employees is your number one priority
Let’s reflect on the guidance from the world’s largest membership organisation for franchisors, franchisees and franchise suppliers. The International Franchise Association (IFA) provides the following advice to franchises to protect employees and customers from the coronavirus:
- Always wash your hands
- Stop touching your face
- Frequently wipe down high-touch surfaces
- Make disinfection wipes available to all
- Put out the hand sanitizer
- Use cleaning products that kill the coronavirus
- Be clear flexible, with your PTO policy
- Keep your distance
Make sure to impose enhanced cleaning protocols on franchisees.
- Create a coronavirus task force
Establish a team that will be responsible for dealing with how the franchise brand responds to the COVID-19 crisis. You’ll need to make sure you’ve considered your franchisees’ and employees’ health and ability to fulfil their role, the supply chain, financial contingency planning and your marketing response.
- Put a work from home protocol into place
There’s a good chance that lots of franchisors have already had to do this. Make sure you’ve considered internet access, connectivity issues, video conferencing etc. You might want to share these 10 tips for working at home like a pro with your team.
- Implement effective communication channels
It’s paramount that you develop communication channels so you can communicate critical information to your entire franchise community. You must know how important transparent communication is to the health of your franchise system, but during an economic crisis where your franchisees will be worried about their livelihood, you need to respond quickly and honestly. Use such channels to give franchisees guidance with how to manage employees during this period.
- Help franchisees make sure they have sufficient liquidity
Work with your franchisees to create the appropriate financial response to the impact of the COVID-19 crisis. Help them identify the methods to use and benchmark KPIs.
- Protect your customer base
While customer demand might be down, this doesn’t mean that it will completely disappear. If your franchise doesn’t already offer online sales or provide a home delivery service, now’s your chance to get started.
- Consider lifting ‘brand standard’ obligations and approved supplier restrictions
You might need to temporarily suspend certain ‘brand standard’ obligations outlined in the franchise agreement. For instance, if a franchise unit has to close because of the virus, you will need to revise provisions concerning minimum staffing requirements, franchise fees and operating hours for example.
You may also need to make changes to approved supplier restrictions due to shortages in stock. Until normal supply lines are back in action, try to allow franchisees to source goods from resources that are readily available.
- Update franchisees on financial assistance from government entities
If you or your franchisees need to suspend operations because of lockdown rules, you’ll need to find out whether you can file claims as part of your insurance policy and what funding your entitled to. Make sure to check out everything the UK government is going to support businesses through the COVID-19 crisis.
- Rethink your expansion plans – for the time being
Consider suspending or extending your store opening deadlines. Your plans that were viable a few months ago might not materialise how you would like in the current economic state. For lots of sectors, it’s wise to wait to see how the economy recovers first.
However, with some industries booming more than ever, for instance, food delivery, grocery stores, entertainment and online learning, you may not always need to take this approach.
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- Take care with your response
For completely valid reasons you may need to take different approaches with different franchisees. But make sure to take care when managing and documenting this process.
- Act based on facts and trusted advice
On the British Franchise Association (bfa) website, there is a list of helpful resources for franchisors and franchisees. You can find everything from the latest government advice and employee payment advice to tips for communicating with employees in a time of a crisis.
Use these tips to mitigate the impact of the COVID-19 crisis on franchise operations
Franchise operations are undoubtedly going to be impacted one way or another by the COVID-19 crisis. No franchise is likely to escape completely unscathed. But in unprecedented times like these, you can only think smart and act quick to give your business the best chance of survival. Make sure that your franchisees take COVID-19 seriously and don’t damage the brand.
Hopefully be keeping in mind these tips, you can lessen the damaging impact it will have on franchise operations. We highly recommend also reading 15 tips for staying positive and being supportive during the COVID-19 crisis.
To help our franchise network and the public during this tough period, we’ve created lots of coronavirus-related content. You can click on one from the link below.
Becky Martin, writer