Franchisee Perspective: Steps Towards a Strong Reopening

Webinar Summary –

This webinar featured IFA franchisee leadership providing unique perspectives on the current and near-future status of their businesses as they grapple with Covid-19 related closures, layoffs, and uncertainty. The panelists discussed what to prioritize as business owners during the downturn, how to communicate to the most important constituencies – your customers, suppliers, employees, and franchisor – and looking toward re-opening while paying close attention to how the market and business environment will have shifted.

Key Bullets –

• Stay focused on your customers, your suppliers, your finances, your employees, and your franchisor
• Set the tone of leadership for your company, and your employees and those around you will follow your lead
• Pay close attention to the ways in which the market landscape, and labor landscaping, are changing. These changes will put you in a good position for re-opening, and to respond to the needs of customers.

Full Bullets –

• Panelists introduced their perspectives
• David Humphrey – laid off 1,400 people
• Five main focus points – juggling them all!
  • Your Customers – remain customer focused throughout this time
    • Remain connected until you re-open; relevant/targeted online sales; community/charity support
    • Position products and services as a spending priority in a world of contained customer spending (maximize share of wallet)
    • Staying connected socially and digitally (especially to younger customers)
  • Your Suppliers
    • Prioritize paying the ones you’ll need for your future; have an “inner circle” you can count on and who can count on you
    • Pre-order those supplies you’ll need to re-open, prepare for a world of shortages
  • Your Finances
    • Start scenario planning now, based on high/low levels of demand, cash, staff availability etc.
    • How far will revenue drop in the first month, and how long will it take to get back up to where it was – then put together your different scenarios
  • Your Employees
    • Seize the opportunity to upgrade your talent – be prepared to compete for good people
    • Make sure your team will feel safe coming back to you; physically, financially, emotionally
  • Your Franchisor
    • Try to see the world from their perspective: understand their needs, concerns, constraints - some will see opportunity, some will see risk down the line
    • Align with other franchisees to push for not just short-term concessions, but change in the model and don’t let this moment go to waste!

• Matthew Patinkin – all stores closed, and laid off over 800 people
  • There are decades where nothing happens, and there are weeks when decades happen
  • Leadership
    • Set the Tone - stay positive and encouraging with your team
    • Overcommunicate - people are afraid, and look to you for guidance; sharing good ideas and best practices. Talk about ways to apply for unemployment insurance, save money etc. Thank people and be positive!
    • Change is Good - some companies don’t like change (they like the status quo).
  • The basics
    • From Operations - Product - Systems & Processes
    • The “new normal”
      • Will people have to wear masks? Protective shields? Food handling and safety?
    • Update – Upgrade - Innovate
  • Put Your Employees First
    • Make them feel welcome
    • Help them feel safe and healthy
    • Motivate them
  • Put Your Customers First
    • Make them feel welcome
    • Help them feel safe and healthy – sending the right message to your customers – clean constantly, show visually how much this matters
    • Motivate them
  • Financial Rigor
    • Don’t be blind
    • Be realistic
    • Preserve cash
  • Treat Every “Re-Open” as a “New Open”
    • Make it Exciting
    • Involve Everyone
    • Have Fun

• Strategies for Surviving & Succeeding
  • “Culture eats strategy for breakfast” – Peter Drucker
  • Build a company that can be transformed by change, rather than simply weather it
    • Also a matter of transforming your thinking, not just your business
  • Move like a crab – moving sideways is faster than moving forward
  • Throw it overboard!
• PPP Loan
  • March 10 – looked at PPE, fear, revenues, new delivery
  • March 14 – FFCRA
  • March 26 – CARES, PPP; IFA Guidance; April 7 loan number received
  • April 14 – PPP Funding
    • Workforce in place for “opening the country”
    • Long term planning versus maximum forgiveness planning
    • 2019 Weekly Minimum Pay + Covid bonus
    • Bring back employees
    • Strong re-opening activities
    • Bringing in customer win-backs to bring back customers (like offering services for free)

Questions:

• Is there anything we can do to engage with staff across our system, or does that get into gray area of joint employer?
  • Be sensitive, but we are in a collaborative environment, and must work together toward success. Franchisor cannot dictate who to hire/benefits/schedules etc. but this doesn’t mean that franchisor cannot provide support express solidarity; offer help to systems, processes, procedures
  • Franchisor is working on procedures and protocols in store, and that makes employees feel better
  • Bigger issues now than joint employer – let’s get from here to there!
• Suggestions for fast casual food franchises?
  • Stay in touch with your people
  • Food: food safety, handling, in-store experience
  • Be in a habit of gathering customer feedback/perspectives or start that habit
• How to address the reality of employees declining to return to work rather than stay on unemployment and collect more money
  • If employee declines to come back, they deem it a voluntary departure
    • Unemployment is then challenged
  • FFCRA mandates a different approach
  • The $600 that the federal government is paying is finite, and there won’t be as low an unemployment rate as there has been in recent years
    • Many stores will default as a result of this economy, and the hiring situation may not be as favorable
  • Caution those employees to think about their long term financial health – this may not happen as much as people say
  • In a great majority of cases, if those people choose not to come back then those aren’t people you needed anyway
• Landlords?
  • Renegotiating leases; repayment over 12 months with 3-month deferral
  • Some landlords are playing hardball
  • No personal guarantees for the panelists’ businesses, but for those that do there is added complexity. Been in communication with landlords