CapitalSpring

While the COVID-19 crisis continues to cause stress and uncertainty for franchise businesses across the globe, one question stands out among the many being asked: How do we get to the other side of this situation?While there isn’t a simple answer, Erik Herrmann, partner and head of <a href="http://www.capitalspring.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=how-the-franchise-industry-can-get-to-the-other-side-of-the-coronavirus-crisis-2712923" target="_blank" rel="nofollow">CapitalSpring’s</a> restaurant investment group, says that the first place to start is gathering executive teams and working closely with franchisees. He said, “This is an all-hands-on-deck situation, so you have to make sure you have the lines of communication open.”Justin Waltz, vice president of operations for <a href="https://www.bigblueswimschool.com/franchising/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=how-the-franchise-industry-can-get-to-the-other-side-of-the-coronavirus-crisis-2712923" target="_blank" rel="nofollow">Big Blue Swim School</a>, agrees, adding that there are key pieces of advice going around that are worth considering while the crisis is showing no signs of an end date.He said, “The feedback that I’m seeing is to minimize layoffs as much as possible, bring back staff when you can get back into business, and get ready for a mass flood of consumer purchasing.”Preparing for that pent-up consumer demand is going to be a major factor that separates the brands that survive COVID-19 from the ones who suffer. While franchisors are finding ways to cut costs, that doesn’t necessarily mean that it’s time to pull back on brand messaging.“I really think that sales, marketing and business development teams need to be aggressive,” said Waltz. “It’s time to be out in front of customers with deals. You want to be the first to welcome back your consumers because when we get out of this, people are going to be excited to be out again.”He continued, adding, “This is an opportunity to grab market share. Business will come back—there’s going to be an incredible influx of consumer demand. That’s why brands need to be ready to hit the marketplace. Everyone will come back to their habits.”How franchise systems communicate with one another during the next few months will determine how they’re viewed by consumers and prospective owners down the line. According to Herrmann, so far, there has been a range of how brands have approached finding the silver lining in this situation.&nbsp;“What we’ve seen is that there are varying levels of performance across the country. Some brands are slower to respond while there are others that are way ahead of this,” Herrmann said. “That’s the learning — responsiveness is different from concept to concept. It’s important to have tight alignment between franchisees and franchisors. That will determine how you optimize and survive on the other side of this thing.”Herrmann adds that it’s important for franchisors to provide support for their franchisees throughout this entire process—not just for validation purposes, but to support their systems as a whole.&nbsp;“Franchisors generally have a more forgiving model than other standalone businesses because they’re more resilient. But right now, there has to be some pain sharing across franchise systems,” said Herrmann. “Smaller franchisees are going to be hurting right now, and the franchisor has to step in to help. If franchisees end up going dark, the franchisor suffers, too, so it’s in everyone’s best interest to be in it together.”Until more information is made available about what the “new normal” will be for businesses moving forward, the most important thing that franchisors can do to get to the other side of COVID-19 is simple.Said Waltz, “The only thing we can do right now is communicate until we know what the future will hold.”

How the Franchise Industry Can Get to the Other Side of the Coronavirus Crisis

1851 Franchise

Industry experts tell 1851 Franchise how brands can prepare to emerge stronger than ever before on the other side of the current economic downturn.

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