Coronavirus and Franchising Webinar: Angela Cote and Red Boswell

Businesses across industries continue to grapple with the disastrous effects of the Coronavirus outbreak this week, and the franchise industry is scrambling to strategize ways to stay afloat. 

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 the first of two webinars today, Powills and Internicola spoke with franchise growth consultant Angela Cote and International Franchise Professionals Group (IFPG) President Red Boswell, both of whom offered a welcome glimmer of hope for the franchising industry.

Here are the key insights from their discussion. 

Positivity Among Franchisors 

There are currently two predominant mindsets in the franchising industry. Some have the mindset of growing, while others have the mindset of fear and stopping business.

Many franchisors are staying positive during this challenging time. Their biggest concerns have to do with taking care of franchisees, and as a result, some innovative strategies are coming to the fore. Many franchisors are looking past the current crisis to prepare themselves for a new landscape on the other side, and they are finding a great deal of opportunity. Unlike the 2008 recession, which offered no immediate path to recovery, the Coronavirus crisis has a light at the end of the tunnel. The industry will exit from this with a stronger online community that benefits franchisees. 

Sensitivity is Key 

Brands must acknowledge the crisis they’re going through, and they must maintain constant and proactive communication with their franchisees. This is not the time for franchisors to hide from franchisees. Franchisees should have a chance to speak and feel heard.

Positive mindsets are great until it takes a hit. Some can take those hits and turn them into fuel, others have trouble recovering. For this reason, there must be sensitivity to people’s experiences. The biggest challenge facing everyone in the industry right now is the unknown.

A leader is someone who acts as a role model and influences people naturally by doing what they’re doing. This is an opportunity to be positive, but also sensitive to the fact that not everyone is in that same mindset. 

Survival Tactics 

Many franchisors have opted to not allow royalty deferment or forgiveness. If products are discounted and royalties are reduced, then some franchisors will lack the resources to support franchisees. 

Staying positive is key to surviving this crisis, not just for franchisors but also for individual franchisees. Franchisees must adopt more of an entrepreneurial mindset and maintain rituals to stay positive and not get stuck in their own heads. Leaders must realize they have a chance to influence people and show others how it’s done during a crisis. 

If you want to analyze every aspect of your cash flow, you must look at every place where you are spending money and figure out a way to preserve as much of it as possible. No one yet fully understands the length or impact of the Coronavirus outbreak. 

This must be a strategic time for emerging brands. Inevitably, some emerging that weren’t prepared to be in the market in the first place will get wiped out, but other, better-fortified brands will have an opportunity to analyze their data during this crisis and come out even stronger on the other side. The conversations about investment and value proposition that emerging brands are having are different than those being had by established brands, and in that respect, emerging brands have a unique opportunity to reposition themselves. 

Looking Towards the Future and Inevitable Changes 

The franchising industry is going to change, and at least one-third of franchises will close as a result of the Coronavirus outbreak. That said, there are some positive changes to look forward to as well. Also, as a general rule, franchise sales tend to go up when the economy is in a downturn. 

Pandemic-related issues have forced a number of businesses to go online, which will force many franchisors to think about whether they truly need to have local owners. If franchisors do want a local, physical presence, they will need to come up with ways to transition customers back to those brick and mortar spaces after the crisis. 

Today, a third of franchisors are hurting, a third are preparing to get to the next level and a third are thriving. It’s the same with franchisees. 

The franchising industry is currently building an educational foundation in real time. The next time a crisis hits, it will be interesting to look back on this time and see how far off we were. It’s important to step away from the day-to-day chaos and put pen to paper about what you want to do on the other side of this. That will be the blueprint for franchisors and franchisees to follow. 

To register for all of this week's Coronavirus and Franchising webinars, click here.