As the global crisis marches on, more and more businesses are finding it hard-pressed to keep the lights on. It is a time of extremes, with new businesses cropping up and some being forced to close down.
For seasoned franchisors, however, this is just a bump in the road. Long months or years of planning and execution is no stranger to businesses focused on franchise development. Concerns on the future of franchising and specific industries are certainly valid. However, it's business as usual when your business is used to playing the long game.
Franchisees and small business owners, however, may feel the pressure of a locked down economy more intensely, and have lower appetite for risk. Franchising used to be a fairly low-risk investment: it still is, but how can businesses take care of their franchisors and distributors in the current crisis?
This is a Heading
It's important to reassure your franchisees and partners that you are committed to riding out and addressing this wave of uncertainty and turmoil with them. The current pandemic doesn't change the fact that franchising comes with less risk. Your support as franchisor is invaluable.
Listen to your teams' concerns and work with them to overcome difficulties they may be having. Now, more than ever, it's important to communicate and be transparent. Open communication lines can help you react as quickly as possible to on-the-ground concerns: perhaps one of your franchisees has already found a solution to a problem starting to affect a different partner.
This is a good time to step up communication frequency while the economy is very volatile. Talk to them and share insights and tips with your franchisees. This will help your partners feel that they are in good hands.
Help Them Stay on Top of Fixed Costs
Some of the biggest challenges for many brick-and-mortar franchises revolve around meeting fixed costs like mortgage, rent, wages, and the like. Every peso saved is important.
Support you can lend to your franchisees to help them manage their cost will be appreciated. You can provide guidance in negotiating with suppliers and landlords. If there are relief packages or loan opportunities that they may be applicable for, let them know about these and help them secure ones that they may need.
Helping them transition to alternative channels of selling and servicing may also be needed so they can boost their numbers. Providing them education and guidance on important aspects of transitioning to online selling, for example, may help them maintain a healthy business.
Help Them Be Kind to Their Customers
Businesses who can be kind to their customers often earn their customers' goodwill and support for the long-term. If your franchisees have a little more leeway in offering special deals to their customers, it helps build relationships and loyalty and may boost morale both ways.
You can offer complimentary services or plan extensions for customers cancelling services due to income impact. Reasonable discounts on necessities and goods may be filtered down to end consumers and provide some relief. Occasional gifts and tokens that may be given to customers will also be remembered fondly and help build loyalty and good will.
Don't Shut Your Doors on New Partners
It may seem counterintuitive to open your coffers to new franchisees and partners during this time. Many businesses are seeing losses and budget cuts in many areas. However, continuing to market to new partners and taking new channels have two effects:
- You are gaining new partners invested in taking more control of their future. They, in turn, can also generate more jobs for this struggling economy. This is the long game. While margins may be thin now, deepening your pool of franchisees will only solidify your business for the future.
- It sends a confidence boost to your current franchisees. If they see you expanding, it sends a signal that this current situation is just another bump in the road that will soon pass. Don't underestimate the morale boost it will give your team.
If you have potential partners who are hesitant, it may help them to know that many similar-minded people have good projections on starting their businesses. Franchise Insights conducted a buyer sentiment survey last March that shows over 55% of respondents agree that now is a good time to start a business.
While 19.2% of respondents have put their plans to start a business on hold, the majority still believe that business conditions will improve in the next three months.
Keep Moving Forward
It is important that franchisors take the reins inmoving forward through the economic crisis for their franchisees. Shared input and cooperation from your partners are important. But now, more than ever, a united front that is quick to establish guidelines and adopt better ways of doing business during the pandemic can turn the tide of business for the whole organization.
Remember these four tips:
- Encourage and reassure your franchisees.
- Help them stay on top of fixed costs.
- Help them be kind to their customers.
- Don't shut your doors on new partners.
Continue to invest in your franchisees and improve your business. Step up communication and pivot quickly if needed. Be transparent and clue in your partners to possible changes in the pipeline.
Together, we will get through this pandemic. We heal as one.