Coronavirus and Franchising Webinar: Day 2 Recap

The Coronavirus has put the franchise industry on pause as companies across sectors scramble to figure out how to deal with mass closures, vastly reduced consumption and a host of other effects — known and unknown — of the outbreak.

This week, 1851 Franchise publisher Nick Powills along with co-host Charles Internicola, founder and partner of the Internicola Law* Firm, are covering the Coronavirus and its impact on the franchising industry through a special three-day webinar series titled “What Coronavirus (COVID-19) Will Mean for Franchise Brands.”

Today, Wednesday, March 18, Powills and Internicola hosted part two of the three-part series, in which they discussed tactics for franchise brands to implement as they deal with the impact of the Coronavirus. 

Here are some of the main insights from their discussion. 

Key resources

The Small Business Administration (SBA): Check the SBA’s website for the latest information and resources related to the Coronavirus. State examiners are in the process of extending registration renewal deadlines. Business owners should check to see if their state has been declared a disaster state. If so, business owners can apply for SBA loans. 

The Families First Coronavirus Response Act: This bill could offer substantial relief for franchisors and franchisees, but it is has not yet reached the Senate, and as the Washington Post points out, there are loopholes. 

Short-term tactics 

Keep an eye on the dialogue. Media coverage is overwhelmingly pessimistic right now, but it will eventually begin talking about recovery and survivor stories. Brands should tell their own stories of successful franchisees who have weathered, for example, the 2008 financial crisis. Eventually, start telling the stories of how your franchisees are managing this crisis. When the time is right, allow franchisees to voice how they are managing their cash flow, and that will build comfort among franchisees. 

Have cash-flow conversations. Brand leadership and franchisees should have a dialogue about the SBA and crucial loans that will be needed throughout the small business community. Franchisors must look out for franchisees in that respect. 

Promote positive mental flow. Entrepreneurs who fail and get back on their feet to try again are the heroes we need in franchising. Check the mental flow as it exists in your organization and identify the people who have the right mentality. 

Make adjustments to system standards. In the short term, franchisors can make adjustments to system standards service and product delivery as countermeasures to accommodate social distancing and mandatory closures.

Do a gut check. Ultimately, trust your gut. We are getting hit from a health angle, a financial angle and a mass-panic angle. There is no one answer to this problem. 

Communication is key. Maintain regular communication and system calls with your team. We haven’t seen the worst of this crisis yet, but there is still so much opportunity to come out of this. Talk to your team. Be transparent about the challenges and emphasize the opportunities.

Evaluate exemptions. This is the time to evaluate exemptions. You might be able to provide data that goes beyond Item 19, which may be necessary at a time like this if you want to attract sophisticated franchisees. Now is not the time to create legal barriers or legal friction if you can make a meaningful deal happen with highly capitalized franchisees. 

Marketing and franchise development tactics 

Do not shut down franchise development. Instead, simplify it, and strip it down to the essentials. 

Tweak the messaging. Make sure your messaging is aligned with the current climate. Do not distribute marketing materials that show a family playing in the park when people are stuck inside with children. This is the time to give the right content, not a time to be cute. The brands that do this sincerely are going to win and leave everyone else behind when we hit recovery. 

Evaluate your franchise sales. Do a rundown of what you are offering in terms of validation, ROI, etc. How is your leadership team focusing and reacting to this crisis? How are your actions influencing franchisee validation? 

Tactics aimed at existing franchisees 

Encourage community outreach. Focus on making sure everyone in your franchise community is reaching out to help each other. A percentage of franchisees might not have been hit yet, but if we transition into a lockdown or full quarantine, the impact is going to be grave. The faster you step up as a leader and say “Let’s plan for the worst and hope for the best,” the better you can brace for impact. Your existing franchisees will never forget how you acted during this crisis and will relay that information during franchisee validation. 

Provide real estate support. Franchisors are asking their legal teams for advice on how to communicate with landlords regarding landlord concessions. Franchisors can provide guidance for franchisees.

Have conversions with your prospects. Make sure your franchise development website is set up for conversions. Many franchise development websites often lack the human interest story. In the future, everyone will want to know how you supported franchisees during the Coronavirus outbreak. Be prepared to have a good answer. 

Now is the time to reevaluate everything and build a tentative strategy. When we reach the intermediate stage, that’s when you’ll deploy your strategy. 

1851 will continue to cover the Coronavirus and its impact on franchising. Tune in tomorrow, Thursday, March 19, at 1 p.m. EDT / 10 am. PDT for part three of the webinar series, which will feature an open Q&A community discussion. Register here.

Franchise brands with questions on how to stay afloat during the Coronavirus outbreak can email [email protected].