Coronavirus and Franchising: David Hicks of HomeVestors and Paolo Ontalan of PickUp USA

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 David Hicks, CEO of HomeVestors and Paolo Ontalan, PickUp USA Fitness National Director of Operations about how the franchising industry is responding to the crisis.

Here are some of the key insights from their discussion.

The Real Estate Market

This is an unprecedented time for real estate. Overall, the number of listings have decreased because sellers don’t want strangers coming over to view their house. This means that the houses that are staying up on the market are in high demand. 

While the 2008 recession was led primarily by the real estate market, this is a very different crisis. Now, there is actually a scarcity of real estate being sold. 

Once things return to normal, sales may slow down. Still, there is no doubt that the real estate market will have a new normal — much of the future depends on how long businesses are shut down. 

Time to Adapt

For those who are naturally averse to change, this crisis will be a much-needed push as businesses are forced to adapt to the new normal.

Established franchisees know that there is always opportunity on the other side of struggle. Since the 2008 recession, HomeVestors has experienced 12 straight years of growth even though they were connected to some of the main pain points of that crisis. Through hard times, business owners learn how to implement best practices and adapt to unprecedented situations.

A strong brand and marketing approach is what will bring franchisors through to the other side of this. Now is a good time to reevaluate branding and consumer messaging.

It is important to create long-term plays in order to keep consumers happy. For example, PickUp USA has decided to void all monthly subscription payments in order to keep customers happy while services are down. The basketball-themed fitness franchise anticipates that it will make back some of this revenue with the wave of pent up consumer demand as people become eager to get back to their favorite workout routines. 

A Supportive Network

Instead of focusing on the corporate side of the business, franchisors need to now prioritize supporting franchisees. That includes providing guidance on managing expenses, utilities, rent deferment, government programs and SBA loans. Additionally, franchisors should review all of the information available to them in order to provide the highest-quality resources and guidance. 

For many franchisees, this crisis has validated their decision to buy a franchise as it has shown them the value of an established network. This presents an opportunity for franchisors to build on that relationship and cultivate a stronger franchise community. 

As an emerging franchisor, the biggest concern is keeping the momentum and excitement going for new franchisees who recently joined the system. Learn from established franchisors who have experience in keeping teams motivated during tough times. 

Franchisors need to develop virtual training programs for new franchisees coming in. Instead of halting the development process all together, offer temporary online training for the time being and schedule in-person meetings for later. 

Overall, constant communication is key but it is also important to be transparent — try to avoid overly negative or positive feedback.