Your Time Has Come — A Message to Franchisors

By Greg Nathan posted April 19, 2020
Be in business for yourself but not by yourself. While it’s a nice slogan, franchisors now truly have the opportunity to demonstrate the power of strong, caring leadership to help their franchisees navigate the current economic crisis. Here are seven strategies to help your franchise network come through in as good shape as possible.

7 strategies for franchisors to show the right leadership

#1 Have zero tolerance for unscrupulous behaviour.

When the majority of the community are vulnerable and hurting, as they are now, there will be an ugly backlash against anyone or any brand seen to be acting opportunistically. It is essential to protect your brand at this time. Make it crystal clear to franchisees they must adhere to laws and ethical guidelines around managing customer payments, employee entitlements, and government funding assistance. Franchisees need to know that, while you absolutely appreciate their financial pressures, you will not tolerate anyone putting the entire brand at risk by acting unscrupulously.

#2 Hold regular live two-way communication sessions.

In periods of rapid change, regular and frequent two-way communication is vital. Just sending out emails will not cut it, and videos, while useful, do not provide the sense of real connection that people need. A daily virtual live meeting for regional or national groups (depending on the size of your network), where franchisees can see and interact with senior executives is recommended. It’s important these meetings are short and sharp, and professionally managed so they remain engaging and constructive.

#3 Support the resilience of your people.

Changes to our business, work and family circumstances are stretching everyone’s mental and emotional resources. Common sources of stress and anxiety include cash flow pressure, uncertainty, strains in family relationships, isolation, and working in a distracting home environment. While everyone’s situation and sensitivity to stress is slightly different, there are proven coping strategies that work for most people. Provide support and tools for franchisees and your teams on how to stay mentally healthy. (Our psychologists have developed a program on this topic — see below.)

#4 Use objective criteria to support individual franchisees.

While each industry or franchise network may face similar trading challenges, every franchisee is in a unique financial situation. This depends on their cash position before the crisis, their tenure, their location, and their ability to proactively adapt to opportunities. While blanket concessions may seem fair, a more prudent approach is to provide assistance where it is most needed. For instance, many networks have “intensive care” guidelines to identify and support franchisees in trouble.

#5 Upskill your field team in essential competencies.

Field managers should remain your frontline for immediate support to franchisees, even if they are not physically out and about. To add value, they need to be across essential skills such as break-even analysis and cash flow management; how to access government subsidies; assisting with supplier, landlord and lender negotiations; how to conduct effective virtual visits; and how to provide useful support for emotionally distressed franchisees. Even if franchisees are not currently trading, field managers can still keep in touch. Especially keep a close eye on any franchisees who have gone quiet as they may not know how to ask for help.

#6 Develop a new short-term business plan.

Because the business environment has significantly changed, many of your previous plans, processes and strategies are now redundant. Do a fresh SWOT analysis and list your key stakeholders. Pick a time horizon, (we have chosen 6 months for our business), and set a vision of what you want to see happen if everyone in the network works hard together, and things go as well as they reasonably could. Then create new goals and action plans. However, there is one thing that shouldn’t change, and that’s your values. Revisit your values and spell out what these look like in practise at this time. This will be the true test of your culture.

#7 Maintain credible leadership.

According to Napoleon Bonaparte “Leaders are dealers in hope”. I like this a lot, as a large part of a franchisor’s job at the moment is to help people maintain a sense of optimism. Credible leadership comes from three sources.
  • Demonstrate your competence by keeping a cool head; staying up to date with relevant information; having a solid crisis plan; and making sound, evidence-based decisions.
  • Be trustworthy and transparent in your dealings by complying with all statutory obligations; following through on your commitments; explaining your strategies; and most importantly, doing the right thing because it’s the right thing to do.
  • Show genuine care and concern for the personal and business health of franchisees. Our research has consistently shown that this engenders brand passion, proactive behaviour from franchisees, and a willingness to recommend your franchise opportunity to others. Your franchisees will remember how you supported them through this critical time, which will have positive flow on effects for the future. On the other hand, a perception by franchisees that you are acting in a self-serving manner will destroy trust and vital goodwill.

How we can support you and your people

The team at the Franchise Relationships Institute have been working hard to pull together practical, relevant services to help you get through this. While these have been mainly developed for our Australian clients, franchisors from other markets are welcome to participate.

Franchisor C-Level Virtual Forum:

Five interactive 90-minute sessions for CEOs and C-Level leaders to share useful ideas, provide mutual support, and engage with a global leadership panel. Cost AUS$480. Limited numbers to maintain intimacy and quality. Click here to get in touch about the next session.

Field Manager Virtual Forum:

Five interactive 90-minute sessions to keep field managers connected and growing, and provide them with tools to keep their franchisees resilient and viable. Includes best practice sharing groups. Cost $395. Limited numbers to maintain intimacy and quality. Click here to get in touch about the next session.

The Psychology of Being Our Best:

These virtual interactive sessions for franchisor support teams and franchisees are conducted by our psychologists, and deliver evidence-based strategies to improve mental resilience, manage relationship strains, and maintain total health in these unusual times. Contact for more details.

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