The Effect COVID Has Had on the Franchising Industry and What To Know
Even though franchising is overall still a booming industry, it has not been exempt from some of the fallout from the COVID-19 pandemic.
A few facets for example, such as the QSR space, have experienced exponential growth. That notwithstanding, necessary changes prompted by the pandemic have caused many franchise owners to take pause to revise their thought processes in order to survive, and hopefully, thrive. This requires a level of agility and flexibility not previously required.
Here are tips we actively share with our clients to achieve success in any market:
The numbers still matter.
ROI and AUV continue to be vital metrics, therefore, franchisees should put additional emphasis on their due diligence. Does the prospective QSR have a drive-thru option? Are they set up properly for easy take-out and to-go orders? Is there adequate outdoor space for dining?
How supportive is the franchisor to their brand partners?
Currently, franchisees are looking for more than just cooperation. They want a brand that will offer responsiveness, collaboration, and true partnership. How will the franchisor support their franchisees with the ever-changing regulations the pandemic has created?
With commercial real estate taking a hit, as have so many other businesses succumbing to the effects of the pandemic, there are now more options in regard to terms, better locations, and the possibility of shared space with brands. It has created a whole new landscape for brick-and-mortar brands.
Franchisees want forward-facing and inventive franchisors that create real-time solutions with technology and systems in order to handle the uncertainty that is still present.
This could include ghost kitchens, takeout windows, cubbies for mobile pick-ups, or other sans dining room options that keep the brand relevant and available to their target customer.
Technology now needs a space of its own in the vetting process for franchisees.
Since many dining rooms are still closed, not all concepts have drive-thrus, and the consumers are still wanting to order-in, the focus has turned to online ordering utilizing a brand’s website, app, or third-party delivery service. To stay competitive, franchisors have been forced into investing their time, money, and energy into these options.
There are still changes to come, and the industry needs to stay vigilant and nimble in order to succeed.
What creative solution to a pandemic-related problem have you seen a brand implement?