How Franchisors Are Supporting Franchisees During These Difficult Times

When the COVID-19 crisis first began, franchisees quickly found themselves at an advantage compared to other entrepreneurs and business owners. While their business may have needed to temporarily close its doors or pivot its operations, franchisees have the support and backing of a franchise system.

Throughout the pandemic, franchisors have been stepping up to the plate in a variety of ways to ensure that their local owners are supported. Some of the most common examples of this support include deferring or forgiving royalties and increasing communication. However, franchisors aren’t stopping there.

For example, The Little Gym, a kids fitness concept, is hosting weekly webinars that give franchisees a dedicated place and time to ask any questions.

“Our weekly webinars are hosted by myself and various executive-level team members, and the topic changes depending on what’s happening in the news cycle,” said Alex Bingham, president and CEO of The Little Gym. “We make sure to touch on funding opportunities, revenue opportunities, how to manage expenses, when and how states are navigating exit strategies, how to market during this time and how to keep staff trained.” 

Franchisors are also helping their local owners find new ways to connect with customers while face-to-face interactions aren’t a possibility. Daniel Lee, head of brand and technology for the restaurant concept Flame Broiler, notes that this is something the brand’s corporate team is continuing to work through.

“A considerable portion of our business was in customer relations, as many of our franchisees work at their stores. They’ve built personal relationships with guests. The same goes for our corporate-owned locations,” said Lee. “We have yet to see how the lack of interaction has affected us, but at a corporate level, we have had to try and come up with ways to maintain that relationship in this environment.”

Bingham agrees with Lee, adding that engaging with members virtually is one of the biggest things The Little Gym has helped franchisees with during this time. “We are a program accustomed to having face-to-face engagement with customers and while navigating this situation, our teams have been able to pivot to online classes,” said Bingham. “We are proud that our system was able to make this transition so quickly.”

Franchisors are also supporting their local owners throughout the COVID-19 crisis by helping them understand what business will look like on the other side of the pandemic. As states start to slowly reopen, brands need to be prepared to implement new safety protocols and procedures to keep their customers and employees safe.

“With our model requiring so much face-to-face contact, we do realize that there will be families who choose not to make direct contact right away,” said Bingham. “Because of this, we know that there is new potential for growth that we had only dreamed of going before. This situation, although not ideal, will help us to put new innovations in place faster than what we thought would be possible. Our system will have an opportunity to capture market share as a result of the way that we offered classes online for free quickly and efficiently.”

Franchisors are also bracing for some of the changes made during COVID-19 to be long-lasting, or even permanent. 

“I think we’re going to permanently see the huge majority of our business shift to take out — I don’t anticipate this becoming less significant anytime soon,” said Lee. “The shift to digital and delivery service, which we had planned on being over the next five to seven years, has all of a sudden taken place within the span of weeks. In a lot of ways, decades of change have been compressed into months since the start of this pandemic.”

Ultimately, the biggest priority that franchisors and franchisees need to focus on together is how to ensure that customers feel comfortable coming back to their businesses. 

Lee said, “We’re going to have to forever maintain an exceptional level of trust with our guests.”