Coronavirus and Franchising Webinar: Sabrina Wall and Lisa Welko

As the Coronavirus pandemic continues to wreak havoc on the franchising industry, companies across all sectors are scrambling to deal with mass closures, vastly reduced consumption and nervous team members.

This week, 1851 Franchise publisher Nick Powills and 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 webinar series titled “Coronavirus and Franchising: Mindset + Strategy to Recover and Grow.”

Today, Tuesday, March 24, Powills and Internicola were joined by Sabrina Wall, founder of Franchise Brokers Association, and Lisa Welko, CFE, to discuss tactics for franchise brands and brokers to implement as they deal with the impact of the Coronavirus. 

Here are some of the key insights from their discussion. 

Legislative Update

Congressional leaders are still negotiating the proposed third Coronavirus stimulus bill.

The New Prospect Funnel

The franchisee prospect funnel is no longer simply about generating leads. With so many different types of investors, franchisors need to focus on creating a compelling story of support and recovery to show that candidates are buying into a system that could get them through the next pandemic. 

The franchise sales environment is not about opportunity anymore, it is about protecting assets and educating candidates on options. The conversation is no longer about getting into business for some side income, it is about stabilizing and surviving. For many candidates, the reason they looked at a business two weeks ago is even stronger now — they want to control their own destiny. 

The more honest a brand is in their storytelling, the more candidates will engage during the research process. Brands who can show definite examples of how they weathered the storm will be successful.

New franchisors should rethink how they position themselves in the industry. For emerging franchisors, the candidate pool may be deeper as high-quality prospects come from industries that have been disrupted. Franchisors should communicate with brokers about the specific types of candidates they are looking for. 

How Franchise Brokers Should Adapt

Brokers should encourage franchisors to communicate with franchisees. Although franchisors are struggling to find the answers, it is critical to create an open dialogue. 

There is a wide spectrum of responses to this pandemic and brokers need to know how to help clients handle the process. Brokers are seeing franchisors that are struggling, some that are unfazed and others that are so overwhelmed with new business that they can’t handle prospect inquiry. 

Brokers need to be educated on what they are selling and in a position to create a good relationship between the franchisor and candidate during this time. It is easy to get hyped up on advertising and marketing instead of getting into the meat of how the brand has performed. The brokers who look at all these things will be the ones buyers trust during this difficult time.

Recession-resistance is no longer a phrase that can be thrown around without evidence — it needs to be proven. Certain franchise brands that may not have been so attractive before are becoming essential businesses, such as cleaning services and maintenance. Good brokers should show candidates the opportunities in these sectors. Bad brokers guide prospects to the brands that pay them the most money instead of being transparent and aligning prospects with businesses that make sense. 

How Franchisors Should Adapt

The biggest thing franchisors need to focus on is supporting their franchisees through the Coronavirus crisis. No more focus on Item 19, franchisors need to show that their system is intact and that when disasters like this happen, franchisees are not alone. Franchisors should redirect all activities to focus on the priority of supporting and communicating with franchisees. 

For franchisors concerned about royalty-reduction requests, it is important to take a practical approach. Show franchisees where the money from royalties is going, whether it be helping negotiate leases, delegating certain tasks, redesigning marketing strategy or adapting the business model. That way, they will be confident that the money they are spending on royalties is helping them stay afloat. 

In order to manage and stabilize, franchisors should be inviting franchisees to be an active part of the solution. The franchisors are the authority but they need to build the right kind of community so that once this crisis passes, the brand can maintain franchisee validation. By not being available to support franchisees during this crisis, franchisors can create a negative impression that is impossible to shake in the long term. 

A Recovery Mindset

We will be seeing the effects of the Coronavirus pandemic for a long time. For example, even after quarantines and social-distancing measures, the hangover of panic will likely lead to a decline in restaurant sales and affect other industries as people remain scared to interact. 

Soon the media will shift from panic to success stories, so the more validation a franchisor can put out there the better. The downturn economy is going to create buyers in the long run. If there isn’t a strong online story being presented, brands will be playing from behind. 

The franchise industry has the potential to be very successful in an economic downturn because there are so many unemployed people looking for new opportunities. The U.S. economy has always rebounded through the actions of small business owners as they are the ones who hire people, buy inventory, invest in real estate, etcetera.

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