Reopening the Automotive Sector of the Franchise Model

Webinar Summary –

Leaders from the Automotive franchising sector offered their perspectives on the reopening and reinvigoration of the automotive services sector in the wake of COVID-19. The panelists discussed their communications strategies, internal procedures, and new customer-facing approaches that led them through the public health crisis and associated economic downturn, and offered suggestions on what practices are here to stay versus which will only be temporary.

Key Bullets –

• Operational and Communications strategy focused on making all relevant stakeholders safe and comfortable, both employees and customers, through new health and safety practices
• Close adherence to CDC and OSHA guidelines in all business practices
• Close, weekly communication with executive team and manager level staff to inform and keep tabs on on-the-ground operations
• Evolve to contactless drop off and pick-up options

Full Bullets –

• Building the Blueprint
  • 300+ different types of business in IFA Membership
  • Blueprint roughly divided into 9 business verticals
  • Working groups within each vertical
  • Worked to identify areas to reexamine
    • Entering & exiting
    • Ordering/queuing
    • Interacting/transacting
  • Franchising is well positioned to implement new safety protocols, given its history of implementing brand standards
• Deploying/Evolving the Blueprint
  • Blueprint sent to Administration Task Force
  • Distributing to Governors and their staffs
  • Distributing to Members of Congress
  • Deploying locally as needed
  • As states reopen, this is intended to be a living document and will continually update
  • As we learn what is working (and what is not) the document will be revised

Barb Moran-Goodrich - Moran Family of Brands

• Operational Strategy
  • Make people feel safe and limit contact
    • WFH for all team members
    • Maintain all team members hours and wages to pre-COVID levels
    • Rolled out pick-up/drop off
    • Expanded no-contact offerings
  • Compassion for other essential workers
    • Created discount for essential workers – 20% off all repairs
    • Local shops launch medical supply drive for local hospitals
  • Created goal of creating public awareness on sanitization of vehicles
    • Multiple franchisees on with local TV stations discussing vehicle sanitization
• Results:
  • Awareness of impact on daily communication and health of relationship
  • Evaluation of essential costs to effectively support franchisees
  • Evaluation of support structure needed for quick response times
  • Seen an increase in franchisee engagement with marketing programs implemented throughout the system
  • Low impact to franchisees with same store sales drop of only 5.8% from April 2020 to April 2019.
• Communications Strategy
  • 3 prong approach –
    • Leadership daily communication  - education, next steps, CARES Act, relief, information, rent negotiations
    • Operations daily communication – Steps to take in pivoting customer delivery process, engagement with customers
    • Marketing Communication  - local marketing campaigns, implementation of campaigns, activating local causes to help, communication steps to customers
  • Tools utilized
    • Daily email updates and responses to questions
    • Private FB daily updates
    • Webinar updates, Zoom, videos
    • Verbal with individual calls from all departments
    • MU University uploads of information

Ralph Yarusso – FullSpeed Automotive (FSA)

• Course of action
  • Automotive repair was listed as an Essential Business in various “shelter in place” orders
  • FSA Executive Team maintained close contact with primary vendors, franchisees, Private Equity partners, financing sources
  • Regular meetings of Exec. Team led following plan:
    • Adoption and adherence to CDC Guidelines
    • Negotiated extended payment terms with key vendors
    • Created cost savings/reduction plan as follows
• Relief for Franchisees – deferred March royalties
  • Implemented aggressive cost-cutting measures
    • Non essential spending on hold
    • Reductions/realignment of field operations
    • Store and regional management salary reductions (retail)
    • Store hours slightly decreased
    • Store techs were put on 32 hour work weeks
    • Travel ban implemented
• Personnel decisions
  • Reduction of corporate staff (31%)
  • Implementation of temporary pay cuts for all salaried employees
    • All exec. Staff – 20% reduction in salary
• Communications
  • Daily call with Exec. Team
  • Repurposed Director of Training to be point liaison with franchisees for all COVID-related communications
  • Weekly call with franchise advisory councils
  • System wide webinar for both brands
    • Vendor programs
    • Lenders – PPP loans and aid
    • FSD’s – Territory round up with Franchisees
• Store Operating Procedures
  • Open for business advertising, customer in vehicle, modified staffing/hours of operations, face masks
  • Adjusted marketing assets to support sales during pandemics; gave marketing dollars back to franchisees to use as they need  empowering them directly
  • Aligned with cleaning franchisees – PuroClean, Jani-King to react quickly to disinfect a center with a positive test. Stressing needs for  appropriate experts in health, safety and other pandemic-related resources
  • In-vehicle service
  • Follow the data…

Post-Covid Strategy

• Follow CDC/OSHA COVID-19 guidelines
• Air purifiers in all offices/rooms in buildings
• Disinfecting lobbies, bay areas and rooms w/ UV or fogger
• Offer online scheduler for service appointments
• Maintain social distance within offices, lobbies, and bay areas
• Communicate via signage with customers on offers and process to stay safe
• Customers and employees wear a facemask when unable to social distance
• Disinfected vehicles inside before service begins and then again prior to delivery
• Offer contactless drop-off and pick-up for service
• Offer after hours drop-off