Coronavirus and Franchising: Ben Terrill of FranNet

The coronavirus continues to have dire effects on businesses across the country, and the franchising industry is no exception. Franchisors across segments are strategizing new ways to support their franchisees, keep customers satisfied, help local communities and come out stronger on the other side of this crisis.

To that end, 1851 Franchise publisher Nick Powills and Charles Internicola, founder and partner of the Internicola Law* Firm, are covering the coronavirus and its impact on the franchising industry through a webinar series titled “Coronavirus and Franchising: Mindset + Strategy to Recover and Grow.”

In today’s afternoon webinar, Powills and Internicola spoke with FranNet broker Ben Terrill to discuss how franchisors and franchise consultants have pivoted to better serve customers and franchisees. 

Here are some of the key insights from their discussion.

How Brokers Can Adapt

If our trajectory is anything like Italy’s, we may soon see a dip in reported COVID-19 cases. After this dip, franchise brands are likely going to shift from bracing for impact to recovery strategies. It will be important for brokers and consultants to keep up with the news to create a successful strategic timeline.

Consultants should talk to all clients on a regular basis and hold their hands through this crisis. You don’t want clients making rash decisions in crisis mode; they need to be thinking long term. 

Franchise brokers should be prepared to answer questions from every franchisor and client in their network. When it comes to business development, networking, looking for clients, talking to referral partners and moving clients through the process, brokers need to have an open mind to changing practices. 

Be prepared for networking and client meetings that used to take place in coffee shops to take place online instead.

For franchise brokers, selling franchises isn’t the only goal right now; it is also about consulting and being an honest partner with the clients. The honest recommendation in certain cases may be a pause. The broker model is about getting clients to buy a franchise, but brokers shouldn’t be scared to consult people out of franchising if it is not the right move. It is never good to push a prospect into making a decision.

What Franchisors Should Be Doing Now

It is important for brokers to ask franchisors about what they are doing for those already in the system. The most effective franchisors are the ones prioritizing communication and supporting partners, whether it be through deferring royalties, special marketing initiatives or other supports. 

Remember, nonstop and unnecessary communication from a franchisor can simply add to the noise if there isn’t anything real and meaningful to say. No need to constantly inundate consumers and franchisees with emails. 

The pressure to get sales recorded may soften a bit for franchisors during this period. Many prospective franchisees who are close to the finish line are taking a two-week pause. Rather than trying to convince them to close the deal, franchisors and brokers should acknowledge their uncertainty and be there for support. Don’t be scared to slow down and take the time to develop a business foundation.

The development pipeline will always have candidates at different parts of the franchise journey. The conversations should change depending on where they are in the process. For example, those in the early stages are less concerned right now and are taking the downtime to do their due diligence.

If a prospective candidate has questions, show them that they are being heard and that the leadership team is available to communicate. 

The franchise brands that will have the best validation in the future will be the ones who had prospects successfully come through the system during this crisis. Future candidates are going to ask brokers for the brands that were truly essential and supportive during coronavirus. 

Franchisors that aren’t franchisee-driven aren’t going to survive in the long run. There may be franchisors who think they made it through this crisis but will actually be doomed from a franchise growth standpoint because of a lack of trust, adaptability or prospective interest.

The Mindset for the Future

Much of the franchising industry’s future success comes down to confidence. If it looks like the country is making progress, the stock market slide will likely stop and people will start to get used to the new normal. Everyone just wants to know that we are moving forward in some way.

No matter what, we are going to emerge differently as a society. In addition to responding to today’s consumer needs, brands need to pivot their business model to be ready for post-crisis consumer and franchisee trends. In the next three months, there will be a whole new group of people looking for business ownership and a whole new space in the industry for emerging concepts.

There are a lot of brokers that just sell franchises, regardless of their viability. Not only will the unviable franchisors fall out during this crisis, the bad brokers will as well. The best franchise brokers will represent the best interest of both the franchisor and the prospect.

For franchise consultants, the thriving job market used to be an incredibly robust competitor as franchisee prospects had many different career choices. Now, with unemployment skyrocketing, it is time for brokers to step up and be there for prospective business owners who are looking for accurate information during this uncertain economic time.