How Franchise Business Should Fight off the Impact of COVID-19

Summary

Are you running a franchise and afraid of the impacts of Coronavirus upon it? Then this article is a must-read for you. Go through this article to learn more about the impacts of COVID-19 on franchise and possible solutions.

Though the COVID-19 pandemic is a human crisis, no one can ignore its impacts on business, franchising in particular. Since 24th February, more coronavirus cases came under the microscope outside China. Eventually, Italy became the centre of the virus in Europe. The number of COVID-19 positive people is climbing every day and the government is battling against the pandemic. In such circumstances, the franchise industry must be prepared for hardships. The number of cases is going to increase further. This increase along with the initiatives taken to fight against it will hurt the international economy. Franchisors should immediately prepare a master plan for dealing with adversities caused by the coronavirus.

A frequently asked question to the franchise experts, “how to start a franchise in Australia” has been replaced by “how franchisors should deal with the aftereffects of coronavirus”.

How Bad the Impact can get?

Very Bad! Business experts have already predicted that economic growth will be beaten brutally through the next two quarters of 2020. The recovery of such a crisis will rely on the drop in the mortality rate of the virus and slowing down its rate of transmission. It would be due to “seasonality” in most of the cases.

Possible Impact on Franchise Industry

Mostly sales and supply chains will be badly affected. Some franchisees may use force majeure clauses to give up on their franchisees. Different sectors will certainly be afflicted with different degrees. Some franchise chains may find a huge drop on their demand while some other franchises including retail may experience delayed demand. Customers would prone to delay the purchase in fear of the pandemic. However, such customers will buy the products when the pandemic is over.

What should be done against such situations?

Well, no miracle shield can save your franchise business from the ruthless impact of coronavirus; but you can consider valuable franchise advice and take some actions that you can take to prepare your franchise network for the pandemic.

Build a Coronavirus Task Force

You need to develop a task force that will be liable for developing strategies to fight against the adverse impact of the virus. Moreover, it will be a multi-disciplinary team that will cover the facts listed below:

• Employees of the business and health of its franchisee’s health, welfare, and ability to continue the functions
• Observing the supply chain for the franchise network
• Financial contingency planning
• Marketing and sales response

Review the Franchise’s Supply Chain & Other 3rd Party Agreements

Franchisors should understand the possible supply chain exposure of the franchise network and develop appropriate contingency plans. Likewise with other third parties, including shopping mall operators, train stations, etc. where the franchisees would have outlets. It will involve reviewing the contracts with the suppliers.

Discuss with your Franchisees

Don’t forget that your franchise setup is not completed without your franchisors. Therefore, you should discuss with your franchisees and ask for their take on this. Try to work together for coming up with an effective plan.

Protect the Franchisee’s Customer Base

Franchisees make a customer base for you. Hence, you too are liable for protecting this customer base. You should support the franchisees for building their Omni-channel distribution strategy. It could even be scope for more creative franchisors and their franchisees.

Sum Up

As coronavirus is continuously increasing its strength and affecting mankind and trade, long-term business implications have a high chance of falling upon the franchisors. Consider the situation and think about how to come out of these troubles so that more aspirant franchisors may ask “how to start a franchise in Australia”.