Franchising and COVID-19: 12 Things for Businesses to Think About

This week, 1851 will be co-hosting a special Franchise Community Webinar on the Coronavirus and Franchise. Register here: https://mbf6e734.clickfunnels.com/webinar-registration1584137477175

Franchisors, franchisees and franchise suppliers alike are not only dealing with the current spread of the virus from the health impact standpoint , but also dealing with what may happen next as it relates to their businesses. With stores like Walmart and Kroeger shortening hours, and Apple’s decision to close all stores outside of China, franchisors should be far along in planning for inevitable scenarios over the next few weeks. Here are some things to consider:

WHAT TO THINK ABOUT:

Sales will tighten: This is a time to think long-term. Yes, franchisors survive on royalties, but royalties only come in if franchisees are making money. A few things to do (if you haven’t already):

1. Systemwide conference call to address concerns and build confidence (executed by the leadership).
2. Extended support calls from the business coaches
3. Continued communication on doing the right thing (from cleaning to execution) in the eyes of the consumer. You don’t want to fumble right now – so, follow the best practices of the industry
4. Be super careful and diligent with your communications. In panic, brands can make mistakes. Make sure you are thinking about prospective repercussions when things settle back down.

Start thinking about the future: Every crisis has an end. Understand this. Think long-term.

Should a Recession follow, be prepared: You will want to study both sides of your business – current franchisees and prospective franchisees. Current franchisees will need rebound support. This is also a good time to coach them on setting up a “rainy day” fund for when another crisis hits. The second part is your future growth. During a recession, buyers come out of the woodwork. Don’t panic with your budget.

Understand that layoffs could have legal implications, reports Nation’s Restaurant News: A federal law, the Worker Adjustment and Retraining Notification Act, or WARN, requires many employers to notify local officials as well as employees in advance of large-scale termination. Employers with 100 or more employees must let them know 60 days in advance if there is going to be a closing or “mass layoff,” defined as a reduction of 33% of the total workforce and 50 full-time employees at a single site for any 30-day period. They also must be notified if their wages are to be decreased by more than 50%. Failure to do so could result in legal penalties.

Be smart with cleaning your surfaces, Wired reports on how long the Coronavirus lasts on Surfaces: Researchers looked at how long the virus can survive on cardboard, plastic, and stainless steel, as well as after being aerosolized and suspended in midair.

Move fast on sick time policies, reports NRN: Without laws, the power is in the hands of the restaurant chains to address employee needs during the crisis. And when laws are present, they do not always apply across all units of a restaurant chain, something that users pointed out on Twitter.

Reusables are being ditched for now, reports TMZ: Starbucks customers are being tasked with a tall order -- to leave their reusable cups at home to help stem the spread of the coronavirus. There are stores all over that have posted signs telling customers it has temporarily paused the use of reusable cups. The store added, "In addition to sanitizing procedures in all our stores, this is one more step we can all take to prevent the spread of coronavirus (COVID-19)."

The Coronavirus and Your Job: What the Boss Can, and can’t, make you do, reports The Wall Street Journal: To better understand what is permissible—and required—in confronting a public-health crisis in the workplace, The Wall Street Journal consulted employment lawyers and other workplace experts. The answers often lie somewhere in the murky balance between the Americans with Disabilities Act, or ADA, which aims to safeguard individuals’ privacy, and Occupational Safety and Health Administration standards, designed to protect workers’ safety. But the body of labor rules and regulations suggest it’s wise to stick to the following guidelines, the experts say.

1851 will continue to report on franchising and the Coronavirus. Check back for more updates. You can also read industry news (#franchisenews) by clicking this link and scrolling down.