Comeback Plan Overview
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You need to be able to weather the storm financially
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You must pivot to the new operating environment
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You aim to keep your employees and customers safe
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You want to bounce back rapidly via sales and marketing initiatives
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An OBJECTIVE is your goal and aligns everyone in simple terms
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KEY RESULTS are how you measure your success; you can’t control this outcome
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INITIATIVES are activities trying to achieve objectives, which you can control 100%
Objective #1:
Weathering the Storm Financially
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Maintain 12-months of runway – meaning you have enough cash to pay your rent and employees. If you don’t you need to put something in place today – which will be a loan, gov grant, subsidy, or any other type of relief.
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Measure having an EBITDA that is not losing 20% of your sales or more. If you are beyond that ratio, maybe the business should shut down completely and take a financial hit for the rent, but not operating.
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Reach a debt-to equity ratio under 0.75. The goal is to make sure that you will have enough cash in the future to pay off the debts that you incur today.
Although we touch on cash flow, profitability and balance sheet with these three indicators, most franchisors are focused exclusively on cashflow in the short term. Profitability and debt service aren’t as much of a focus right now (other than thinking of them while you figure out your cashflow issues), but they will become critical over the next few months.
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Develop cashflow model with three scenarios (optimistic, pessimistic, realistic)
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Perform weekly cashflow review
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Apply for government relief
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Negotiate relief with landlord, suppliers and lenders
- Negotiate with bank to assist with cash flow by increasing the line of credit
- Develop strategy for worst case scenario (equity investment from a new partner, divestment to multi-unit operator or shutdown)
Objective #2:
Pivot to the New Operating Environment
- All employees have completed the franchisor’s new training course – checking that everyone is aligned with your new operational processes
- Keep labor costs under 33% of sales – the actual ratio will vary based on your cash flow targets, but your staffing plans will likely have changed
- Keep COGS under 33% of sales – you may need to change how you operate to reach this goal
- Attend franchisor webinars / watch franchisor videos
- Implement franchisor’s new workflows to be aligned with the new environment
- Define new work schedules based on cashflow scenarios (reduced hours/staff, etc.)
- Define reduced product offering to minimize inventory carry
- Update product availability across all online platforms
- Consider grocery staples and produce baskets additions to meet supplier minimums
- Perform daily sales/inventory reviews and compare to cash flow models to be more efficient on inventory ordering
Objective #3:
Keep your Employees and Customers Safe
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No employees or customers are contaminated at your place of business – hard because maybe they get infected at the grocery store, but nice key result to aim towards
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Have all employees perform new COVID-19 training material – specific procedures related to sanitization and such
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Install new recommended signage / protective barriers / sanitizing stations
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Train staff on new COVID-19 procedures (cleaning, disinfecting, social distancing, recognizing symptoms, etc.)
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Perform check-ins with staff to ensure they feel safe at work
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Monitor your franchisor’s communications daily to stay abreast of best practices
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Communicate with local health to learn about local regulations which apply
Objective #4:
Bounce Back Rapidly Via Sales and Marketing Initiatives
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Achieve 250 marketing campaign conversions – measuring the success of whatever pandemic-aware campaign you are running
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Add 250 new customers to our loyalty mailing list – a bigger list you can market to on a continuous basis
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Receive 250 new downloads of our app – expanding the list of people you can reach with promotional offers
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Increase average transaction size to $20.00. Online transactions are great but they can create a lot of busy work. If you can tack on upsells like grocery staples, it can benefit you.
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Review tone and messaging of the franchisor’s proposed marketing campaigns
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Perform one community engagement campaign. There are a bunch of franchises like sponsor a meal for front-line workers, where the franchisee delivers that food but gets paid for by a member of the community – it is a paying it forward. It also helps them achieve the minimums they need to keep to order from certain suppliers
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Perform a marketing campaign on social media
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Perform a direct mail campaign
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Perform a PR campaign; contact 3 local media outlets to pitch them the story.
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Perform an email blast campaign to loyalty/app members
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Perform weekly marketing ROI analysis and course correct if needed
Operationalizing Your Plan
Here, you can see a summary of the objectives, along with a chart showing whether or not they are on track.
They Key Results and Initiatives are also seen, aligned with their relevant objective.
On each key result, you have an opportunity to check in, show whether or not you are on track, and put in a note for future reference.
With FranchiseBlast’s Business Plan module you are able to collaboratively define the comeback plan and, more importantly to avoid it sitting on a shelf and going stale, come back to it on a recurring basis.
You can also choose to implement your comeback plan as a self-assessment which would be more in line with a simple checklist. By sending out the self-assessment on a recurring basis, it stays top of mind. The individual questions would be formulated a bit differently (Did you perform your weekly cashflow review? Do you have enough cash for the next 3 months in a pessimistic scenario? etc). This model is a better fit for franchises where franchisee engagement is not currently optimal and/or franchisors who have had to furlough a large portion of their teams. In both of these cases, it is difficult or impossible to setup coaching sessions to review the comeback plan.
Download the Comeback Plan Now!
We are pleased to offer the Franchise Comeback plan in PDF form below, to help you with this effort.