Coronavirus and Franchising Webinar: Robert Cresanti of the International Franchise Association

The coronavirus continues to have dire effects on businesses across the country, and the franchise 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 Robert Cresanti, President of the International Franchise Association, about how the franchise industry is responding to this crisis.

Here are some key insights from their discussion. 

What the Franchise Community Should be Doing

On Thursday, the U.S. Small Business Administration issued an interim final rule for the Paycheck Protection Program (PPP), which is offering $349 billion in forgivable loans that small businesses impacted by the coronavirus pandemic can use to cover costs, including payroll and rent. IFA has been working hard to promote the needs of small business owners.

Whether it be franchisors, suppliers or law firms, everyone with a banking relationship or business loan should be contacting their bank about the CARE Act’s Paycheck Protection Program. Fill out an application for a loan, regardless of how your business is doing currently. Even if the company is running better than ever, talk to these lenders as soon as possible because eventually the funds will run out.

Large banks such as Bank of America have been receiving record loan application volumes today. The amount of loans that have gone through the SBA are at historic highs, with a months-worth of applications coming in one hour. 

All those in the franchise space need to get the materials together and communicate with the banks as soon as possible before they become flooded with requests. Several big banks such as Chase aren’t offering these PPP loans yet as they are waiting for further clarification from the government. 

The two tests to qualify for these loans are fairly clear: Do you have a deposit with the bank and do you have a lending credit with the bank? If you have both of these things, you are qualified for these PPP loans. Billions of dollars in loans are already coming through on day one.

Head to the IFA website to see guidance and forms in regards to applying for these PPP loans. 

While a fourth phase of the coronavirus stimulus package is in the works, it will likely be challenged in Congress. As a consequence of the last phase, many employees could earn more money at home on unemployment than in the remaining available jobs, which makes it very hard for those trying to take out loans on the condition of hiring employees back.

This morning, Nancy Pelosi noted that the new phase of the stimulus package likely will include more small business assistance.  

A Long-Term Approach 

Everyday, franchisors are being presented with more questions, especially in regards to the new stimulus package, including how to repay loans, how to qualify for loans and how to file.

The IFA is doing everything it can to work with banks and government officials in order to make a difference for small businesses in the long run. It is important to make sure that everyone has the chance to be successful. 

The goal of the Paycheck Protection Program is to give money to small businesses in order to keep people employed and keep businesses growing. Moving forward, IFA will continue to work with legislators in order to put new strategies in play based on the success of this program.

Unfortunately, this current stimulus phase fund may run out before making it to everyone who needs it. 

Priorities for the Next Two Weeks

IFA needs help from the franchising community in bringing digital communications to Capitol Hill. You can text “FAN” to 52886 in order to join the network. Whether you are a franchisor, franchisee or supplier, IFA is building a network of concerned business owners. 

For those who sign up, the IFA will stay in communication and send updates about legislation being put in front of Congress. Additionally, each member of the network will be provided letters that can be sent directly to their local city councilmen to articulate the needs of small businesses. 

Members can also fill out questionnaires to provide information so they are informed when certain issues are addressed. 

Many businesses are faking it until they make in, and “flat” may become the new “up” when it comes to growth trajectories. In the coming days, we will see how many individuals are able to access these funds. If there are problems with these fundings at the government level, businesses may have to make very tough decisions.