5 franchise struggles in the post-pandemic era


The pandemic and the ensuing economic unrest caused many business owners and entrepreneurs to reevaluate their ideas and gain even more faith in what might be feasible. Most firms entered the COVID-19 era intending to survive. They survived by strengthening their vulnerabilities. Many innovative changes assisted numerous franchises around the nation in developing a more sustainable business model. But now, in the post-pandemic era, franchisees need to be wary of these struggles to survive and prosper.

Here are the five struggles that every franchise should be wary of:

Maintain Leadership

A lack of leadership in the post-pandemic era could lead to an increase in earnings challenges, a disjointed policy, and a disgruntled set of franchisees. During this time, franchisees must also demonstrate micro-level leadership. Employees should be encouraged to express their concerns and issues. They can also share best practices with franchisors, allowing them to be implemented across multiple franchises.

Leadership strategies implemented at the beginning of the pandemic should be continued and maintained. Franchisees should communicate with their franchisors. They should encourage open communication. Franchisees should be transparent about their concerns, and franchisors should encourage collaboration. It will be critical to be able to draw insight from across the network of franchisees as businesses reopen and are ordered to lockdown again.

Connect with customers and employees

Prior to COVID-19, franchise systems found it much easier to maintain a positive public image. Great customer service was the most effective way to build a positive public image. 

Franchisors must also be concerned about the health of their customers and employees and keep up with changing legal operating requirements. Maintaining a positive image may necessitate going above and beyond the legal requirements. 

Franchisees who are concerned about their long-term reputation may want to consider providing their employees with more benefits. For instance, enforcing policies that favour your employees can help retain them in the longer run. You might enable policies that allow your employees to take paid leaves or offer benefits that help improve overall organizational morale. In return, this helps build loyalty in the long run. Not just that, customers also like to keep an eye on how the franchises are training their employees. 

An Adaptable Franchise Model

Franchises in the food services franchise industry have been forced to adapt to deliver their goods and services. Many franchises proactively shifted to delivery-only and to-go business models when businesses began to close this past spring.

Even if legal requirements were met, franchisors who tried to hold out faced public scrutiny for putting the community and employees at risk. As a result, anticipating changes and being among the first in the group to move is one challenge. In this present age, it is better to err on the side of caution, even if it costs the franchise more money. As a result, having a flexible model and anticipating multiple operating environments is critical. 

Since the franchisor distributes operating models, it is up to them to adopt new operating models to reflect the new reality. They must carefully communicate these changes and how future customer interactions should look. 

Communicate with customers

The communication between franchisors and franchisees is important as it influences consumer perception of how the overall brand is performing. Customers appreciate consistent messaging about how a franchisee intends to deal with an issue or problem.

There is a challenge in the case of COVID-19 that there will most likely be non-uniform approaches to business operating procedures due to inconsistency in the state and local guidelines. However, clear messaging about how franchisees in common regions should operate should remain.

To ensure that businesses can adapt their operations to the current health situation, they must persuade their customers that their health and safety are being protected. It necessitates collaboration between franchisees and franchisors. Collaboration to send a clear message will be critical to sustaining customer relationships after the pandemic.

Sufficient capital

During the first years of a franchise’s operation, the costs of supporting franchisees typically outweigh the revenue from royalties and fees. New franchises will face the challenge of raising enough capital to support their franchisees’ infrastructure. This includes assistance with marketing, accounting, and operations.

Franchisors should be aware of these costs and understand how many franchisee units can operate at a loss or break even. They should exercise caution when expanding and, if necessary, consolidate franchises. It is preferable to provide the same level of support to fewer franchisees than to provide inadequate support to more franchisees.

There is currently a lot going on in the post-pandemic era for franchises. It is definitely the time that franchises embrace the above learnings and take advantage of them for a more sustainable business model.  Franchisors need to also make sure to not be apprehensive about pursuing franchise sales. The post-pandemic era is less scary than many would consider it to be. 

By KD Kuldeep Singh, Business Coach.


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