Promise of increased support for franchisees

Holly Barnes | DC Strategy

It’s no secret that multiple industries have been widely affected by the global pandemic that has halted the usually-busy streets, shopping centres and food courts, causing changes to trading hours, countless job losses and a rising decrease in business profits.

 

The franchising industry is no different, with major stores and popular locations closed and a number of networks adapting their services to comply with the new changes. The updated social distancing rules, increased hygiene expectations and consumer fears have provided extra pressure for businesses.

 

The biggest challenge franchises face is generating enough income to pay wages, rent and suppliers (even with government subsidies) to be able to keep trading. Adjusting to the new regulations is no easy task and businesses of all sizes are feeling the effects caused by the ongoing global crisis. In a positive move, the government recently announced multiple ways that it will help businesses, including a JobSeeker stimulus package and a code of conduct for rent relief.

 

So what support are franchisors providing to their franchisees?

 

We spoke to a number of franchisors still open for business and asked them how they are supporting their franchisees through this period.

 

It’s during these uncertain times that being part of a franchise network can be a massive benefit. Franchisors are expected to stand up and support their network more than ever through increased communication, guidance, and support systems to help their franchise partners. Being part of a franchise system gives franchisees peace of mind in knowing that they are part of a network, pulling together to find solutions and opportunities, as well as being supported and backed by the franchisor.

 

In a move to highlight their ongoing support and commitment, Ben & Jerry’s have provided the following benefits to their franchisees:

 

● Waived all fees, with ongoing reviews whilst restrictions are in place

● Quadrupled payment terms for ice cream to help with cash flow

● Worked with all suppliers to negotiate extended payment terms, reduced fees and deferrals

● Supporting landlord negotiations for rental abatements and deferrals

● Arranged free, expert advice and Q&A sessions with accountants and governing bodies

● Launched trials with 2 new delivery partners in the past 2 weeks and pivoted into delivery channels more than ever

● Increased online training options and project launches to set the stores up for success when reopening

 

At the same time, MBE have also stepped up their efforts to ensure that their franchisees are kept up to date, feel supported and have the best systems available. MBE Australia CEO, Clayton Treloar has said that they’re doing everything they can to help their franchise

partners. "Here at MBE, we're working around the clock to ensure that our franchisees are supported and given the necessary tools to keep operating in order to help other businesses and customers. We've made multiple changes to our operating systems and improved our offering to comply with government restrictions and regulations. We're doing everything we can to support franchisees, including the following additional benefits:

 

● MBE has put an ongoing freeze on marketing royalties for a possible 6 months.

● MBE's model is a % royalty fee, so as sales drop then so will the royalties charged.

● All IT fees have been frozen for 6 months

● Ongoing communication with the Franchise Council of Australia to understand all franchisee rights throughout the pandemic

● Discussions with many landlords who have offered very attractive rent relief for the time being and have promised to weather the storm through this ordeal

● Their operational team has also secured relief from suppliers and leasing companies by requesting freezes on equipment leases

● MBE's online training programs and schedule have increased, giving the opportunity

for any staff working from home to also get up to date.

 

In some cases, businesses have continued to experience growth. Matt Fitton, Co-Founder of Nurse Next Door Australia says that their team has responded to the current global crisis by doing what they do best - “Making Lives Better”. He said that, "As an essential service Nurse Next Door is continuing to experience growth, in fact this is a time when we're reminded of why we do what we do, and the calls for care have increased by close to 40% across the system, since COVID-19 emerged.

 

As a system we've put various support structures in place for our franchise partners, including centralised sourcing of personal protective equipment and the development of a virtual recruitment platform. However the stand out, which I believe is truly indicative of

Nurse Next Door's commitment to working with our franchise partners to find 'one best way' through this pandemic, is the implementation of a Clinical Task Force from day 1. This is a team of senior Nurse Next Door HeartQuarters staff, nurses and clinicians, providing credible, researched, up to date information, with a public health focus, that our partners can rely upon to make decisions about their own business. We've just started to scale back from system-wide daily calls with the clinical task force and now come together as a system every second day. Our goal is to ensure our partners can have any clinical questions or real life scenarios dealt with quickly and professionally, allowing them to remain focused on the growth of their business rather than spending their day staying on top of the massive amount of information being disseminated by governments and public health officials."

 

While there’s still uncertainty and possible hardships ahead, it’s important to focus on the positive stories and businesses need to do whatever it takes to keep moving forward. Now more than ever, we need to rally together and support each other, no matter how big or small.