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Between Now and Normal – Turning Back On the Franchise System - Part 1

It has been said that we are living through unprecedented or uncertain times. This may be true, but what will become even truer as we push through 2020 is that nothing tomorrow is certain. It feels a bit to me like the ramp up of Y2K era from 1995 through January 1st, 2000. Everyone in the software and hardware industries were working tirelessly to try and evaluate and be ready for all of the possibilities of ‘what might happen’. In this 3-part series, we will look at some best practices, or possibly let’s say ‘anticipated best practices’ on how to Turn Your Franchise System Back On.

As we look between Now and Normal, there are several key component areas that need to be addressed and focused on. In Part 1 of this series we will discuss Communications, both with the franchisees and with the public.

Communications with franchisees

Communications during this unprecedented time will admittedly vary widely. Some franchisors will differ because of personality or leadership styles, while other systems have the luxury of using of Franchisee Advisory Councils or Franchisee Associations to assist in discussions.  Obviously if your system has an Advisory Council or Franchisee Association, encourage for them to speaking with their respective members at least weekly as the franchise system ramps back up. You really cannot have enough communications with your franchisees during these times. The days of you, the franchisor, having a good understanding of the situation at a particular franchisee’s location, are temporarily gone – unless you plan on turning your entire franchise support crew into immortals that need no sleep, you have no hope of keeping up on all the local options, requirements and plans, until things truly go get back to our “new normal”.  If you have not grown to the size of needing a Franchisee Advisory Council or Franchisee Association, or if you have simply not added them to your system, then your franchisee support team and the field agents or quality control staff are your best choices to lead the Franchisee Communication Team. As the franchisor, the executive level must trust their Franchisee Communication Team. They need to be given empowerment to make individual choices about a particular location. Although this may seem like a weird statement coming out of a franchise attorneys thought processes, simply pulling out the Franchise Agreement to see what it says the franchisee shall or shall not do, is probably not in your best interests right now. Each location will come back online differently. You can even anticipate that franchise locations in the same town, under the same local regulations, may not come online at the same time. There are many more moving parts than that.

The Franchisee Communication Team (“Team”) needs to be having candid conversations with each of the franchisees right now about their responses to the question, “What barriers do you see to reopening your location, once the “shelter-in-place” has been lifted?” The Team is looking for acknowledgement that the franchisee has thought through this question. Most likely they have.

We’ve had more than one client mention that the use of video conferencing and other group communication tools that allow for some open dialogue between all parties has been a critical way to keep all the franchisee’s on the same page, and also to minimize the potential for misleading or dangerous rumors to be spread throughout the system.

The Team also needs to find out if the franchisee’s employees are still in place, still working, or are willing to come back to work once they can. There are some employees in some industries that may not be available to bring back to work, if they took another position while the franchised location was closed. Thus some locations who have enough waiting employees to reopen at the turn of a switch, others may have to go through an advertising, interviewing, and hiring stage first. Another topic of conversation is the franchisee’s neighboring businesses statuses. Are they open, have they been open the entire time, and if they are not open, when do they plan on re-opening again? It may not make much sense for your franchisee to reopen, if they are the only one in the plaza that is going to be open, especially if they rely typically on anchor stores or other types of businesses for some synergistic foot traffic.

Usually when you are making changes to the system, you are afforded the ability to test and measure the results before rolling out the change systemwide. Unfortunately, most will not have that ability, so measuring results and tracking and gathering that information as quickly as possible will still allow for any modifications for the next locations to re-open is the correct and best practice to utilize.

Within the franchise industry there have also been discussions on messaging and the best uses of the franchise system’s marketing or business branding fund. The discussions have been around which path to take, on a more localized level versus the preexisting typical path for the system?wide level use. Because the system re?openings are not going to be uniform or on a total system?wide basis, a strategy should be developed for which markets should be targeted, on what schedule, and what specific type of messaging might be appropriate for that time period, both seasonally and related to where in this “recovery period” you are.

It looks as if there will be a reverse timeline regarding re-opening across the country, with the rural and suburban areas opening first, as they were least impacted by the virus, with the heavily populated metropolitan areas getting “back to normal” last.

Regardless of planning, no one is anticipating that there will not be challenges because of unanticipated situations. Trust in your Team, and allow the franchisees to come online at their earliest convenient time for their particular situation. And document everything, with dates and times of the occurrences. Also document any brand standard deviations you have temporarily allowed and for what reason you allowed it. You will need this information as we go throughout the year and into next year, and so will your franchise development team.

Communications with the public

Dissemination of accurate information about the franchise system is especially important. It is imperative that the point gets across that the franchisor’s leadership is taking things seriously and thinking critically. For franchisee’s to open or re-open successfully you must regain or continue gaining the public’s trust.

Do this by sharing the facts that you are allowing locations to come back online as it make sense for them to do so safely (if you are staggering re-openings), because you care about your “family of franchisee’s and their employee’s”. Share about what you have done and and how you have trained your franchisee’s on how to keep the customers safe, especially with regards to cleaning procedures and quality control new standards. It is always best to provide franchisees with information from authoritative federal sources, such as osha.gov and cdc.gov websites, and then tell the public that your franchisees are following and monitoring those sites for best practices, as they become published and known. These published best practices will most likely keep changing, so check back often and continue to train your franchisees on what the new ‘best practice’ is. By ensuring the public that you are following the CDC guidelines, you will help put them at rest that they can come back to your brand, once they are allowed to.

Some brands are utilizing a ‘countdown to reopen clock’ on their websites, that counts down until the date that the Executive Order to shelter-in-place is over. You can always restart it if that date moves again. (Here’s hoping that does not happen). Everyone, franchisee’s and customers alike, are looking forward to your brand reopening, so allow them to help you in the celebration, and anticipation.

Ms. Shelton in a previous life was a franchisor of a large franchise system, and is currently a Senior Attorney for Shelton Law & Associates franchise law firm. Shelton Law & Associates (“SLA”) Attorneys have 50+ years’ business consulting, franchise and trademark experience. Their knowledge facilitates an understanding of a large variety of businesses, services and technologies. They help businesses protect their Brands through Trademark, Copyright, and Business contractual transactions. These services allow SLA to “Expand their Brand®” through Franchising.  For Franchisors, SLA provides full outsourced in-house counsel and consulting.

Shelton Law & Associates additionally works with entrepreneurs buying franchises by assisting with Business Creation, Industry Evaluations, Franchise Disclosure Document Review, Fairness Factors, Opinion Letters and Negotiations.

For more information or to schedule a customized consultation for your business you can write to franchising@SLA.Law or call (866) 99-FRANCHISE.

Shelton Law & Associates Law Industry Expert
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