Franchise Blog - Surviving the lockdown and coming out stronger
The COVID-19 pandemic has placed a huge strain on the business community and will cast a long shadow for months, if not years, to come. There will be casualties along the way and the franchise sector will be no exception. Everyone needs to be collectively pulling together, so franchisors and franchisees alike can endure the impact of the crisis and be best placed to kick-start the economy as restrictions are lifted. What is needed to survive and how franchise businesses should be approaching the situation to come out the other side stronger?
Business as usual (as much as possible)
Profitable franchisors, backed by good business practices, are in most cases riding out the storm and sustaining themselves. The cleaning sector has been thrust into the limelight in recent weeks, but it is only those that are well placed to survive that can truly take advantage of opportunities during the lockdown and beyond. If a business spends too much time firefighting, there are not enough resources left to plan, manage and lead.
The furlough scheme has been an admirable initiative and enabled businesses to retain staff, but this should be used as the last resort. Ecocleen itself has furloughed less than 20 per cent of our workforce, which has still been a hugely difficult but necessary decision. Many of these have however remained on full pay because we have been able to work closely with customers during the lockdown to come to mutually satisfactory agreements, where cleaning operations have been reduced or put on hold. This has really demonstrated the true value of positive customer relations.
Having both great relationships and the experience of dealing with banks is a key strength for any franchisor, and means they can receive and provide the support needed during both challenging times and periods of growth.
Many of the organisations that have been heard shouting the loudest about the lack of borrowing facilities or support from financial institutions, are probably the ones that have not spent the time nurturing the relationship with their bank. It is important to realise your bank is a key stakeholder, and as such, needs to feel included, wanted and part of your plans. Communicate with them regularly and you will understand each other that much better. Having the right partners in place is a key ingredient for running any successful business.
Ecocleen recently helped one of our franchisees to secure an interruption loan after they had initially been turned down. We were able to use our understanding of how lenders work to liaise with their bank’s head of franchising to overcome the initial concerns. There were some additional conditions attached of course – including extending the length of the franchise agreement – but we were able to work with the franchisee to ensure these were met. Had the re-application failed, we had already lined up an alternative loan with our own bank, even though they had no direct relationship with the franchisee.
Adversity should bring a franchisor and its network closer together, and if not, why not? The franchisor should be doing their upmost to ensure franchisees survive, so they can hit the ground running on the other side. Its about everyone pulling together collectively towards a common goal, but also making franchisees feel like you have their backs no matter what.
Communication is key to ensure no one feels alone during these unprecedented trading conditions, whether this regular 1-2-1 calls, Team video calls or even just a WhatsApp group. This is not simply about business management and planning, but also interacting on a human level or having a bit of light-hearted fun to make certain everyone is coping well through the crisis. At Ecocleen, we have seen some of the barriers and conformities removed that maybe existed previously, so it really has brought everyone closer together.
Building bridges and introducing good business practice will in the end pay dividends because everyone is synced and can work together quicker. A them and us approach will simply create fractures within the business. The pandemic is likely to expose any weaknesses in a franchise network, so it is about having central support in place to provide leadership to keep everyone motivated and quickly resolving any issues.
If a franchisor does not have bilateral dialogue with their franchisees, it will become increasingly difficult to manage these essential stakeholders that are so crucial to the business. When we took over Ecocleen, having previously been a franchisee, our aim was to establish close ties and introduce standardised processes. They may not have previously admitted it, but our franchisees are now coming to realise that everything we have been implementing is in their best interests. However, there are no short cuts to success. It is about investing in your central team and building a culture that enables close support and cooperation.
Taking advantage of opportunitieswhen they present themselves is crucial if you are to grow, or at least maintain your business, through the crisis. There is also a chance to take stock and plan next steps during any enforced downtime, no-one should be standing still.
Keeping close with customers, even if there has been a drop-off in work, will ensure you are well-placed to meet any changing requirements or identify new opportunities. There has been a realisation, certainly in the sectors we are working in, about the value of working with highly professional companies that are willing to take a pragmatic approach to survive the current challenges. Having a good reputation is therefore important and will ultimately result in business from new and existing clients.
We have seen some of our franchisees adapt their service offering to support their customers or take advantage of opportunities. Whether this has been introducing sanitisation and deep clean services or providing hygiene and PPE consumables it has helped to strengthen relationships, create additional revenue streams, and win new business. Being proactive and not being complacent has allowed some to generate immediate-and longer-term growth.
Making difficult decisions
Sometime tough choices must be made to protect the brand and avoid longer-term damage. It is important not to shy away from these decisions, even if it feels like a backward step in the short-term. Franchisors and franchisees need to be honest when something is not working, so action can be taken to resolve issues or look at even parting ways.
From a franchisor perspective, its about finding the right people to work with that share your vision and have the determination to succeed. Otherwise you are at risk of having franchisees that could drag down the brand and when difficult circumstances occur, such as the current crisis, threaten the wellbeing of the business.