Category

COVID-19

Presentation: 7 Ways Franchise Operations Have Changed in 2020

By | COVID-19, Franchise Trends

The world has changed, have you changed with it? Take a moment to explore this enticing content about how franchising has changed in 2020, and what you can do.



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2020 Franchise Operations Edit

By | COVID-19
2020 Franchise Operations Edit
For virtually everyone in franchising, this was not the way that 2020 was supposed to go. For many of us, the world feels like it has been turned upside down. There are some positive stories. On the franchise development side, we can see there is an anticipated move towards entrepreneurship increasing sales, for example. On the operations side, we are adjusting, and making tweaks to our audits, processes and plans.
Based on real-life examples we are hearing from our customers, here are 7 things that you can do to adapt your operations* in 2020. While many of these involve the pandemic, we also have a legislative change at the end.

1.Enhanced Opening Procedures

Since Personal Protective Equipment (PPE) equipment is required in many areas, you may need to add the purchase of PPE Equipment to your opening procedure.

Sample:

Add to Opening Checklist: 
“Order all required PPE equipment from an approved vendor. This includes hand sanitizer, extra face masks, and a contactless thermometer.”

2. Edited Audit and Projects Sections

Franchisors typically have opening procedures separated out by department. These can include:
  • Training
  • IT Support
  • Construction
  • Field Support
  • Accounting
The relevant departments will then pay close attention to the sections that have their names on it – building accountability across the system. During the pandemic, many franchisors have had to put staff on furlough, or leave, moving responsibilities from one team to another.

Sample:

Field support may be covering tasks of a reduced training team. As a result, you may want to move some of those sections of the audits.
“Confirm prices on Catering Menu” > Move from Training to Field Support section.

3. Uniform Changes Adding Face Coverings

Most audits have some questions regarding uniforms. With mask coverings required in some areas, you may want a question added for franchisees in those regions.

Sample:

Add to Audit:
“Team Member in uniform including face coverings in place. Worn correctly over the nose and mouth.”

4. Signage and Local Mask Regulations

In other areas, customers are required to wear masks indoors. As a result, there may be some additional signage required when people enter the premises.

Sample:

Add to Self-Assessment: 
“If your State/Province/County/Region/City requires customers wearing masks while inside, having the appropriate signs up at all entrances and the POS.”

5. Daily Self-Check Procedures

Some franchisors who are doing in-person audits again, are requiring auditors to perform a daily check on themselves before entering the premises. This is a way to create a virtual paper trail now, and into the future.

Sample: 

Add self-check audit:
  1. Are you experiencing any of the following symptoms associated with COVID 19 – fever, new cough, dry cough, shortness of breath, difficulty breathing, aches, runny nose, or sore throat?
  2. Have you or someone you are in close contact with traveled outside of the country in the last 14 days?
  3. Has someone you are in close contact with tested positive for COVID-19 or shown the symptoms of COVID-19 in the past 14 days?

6. Edited Franchise Business Plans

Franchise Business Plans that were made in good faith in January, have likely changed. But, the environment in 2020 does not mean that the plan has to be thrown away. At the same time, you want to focus on having a plan that is flexible but still offers some structure.

Sample:

Before, you were helping your franchisees grow revenue, but now you are supporting them as they weather the storm. You may also have also changed some of your initiatives based on a more socially-distant world.
Objective: “Grow revenue for the franchise.” > Change to “Weather the storm revenue-wise.”
Key Result: “Increase inbound leads by 20%.” > Change to “Increase online leads by 20%.”
Initiative: “Attend 2 Community events/year (fairs, parades, festivals, etc.)” > Change to “Run Instagram campaign with Agency”

7. California Consumer Privacy Act

Not all changes are related to the pandemic. We cannot forget that there was recently important legislation passed in America’s third-largest state. The California Consumer Privacy Act went into effect on January 1, 2020.

Sample:

Add to Audit for California locations: 
“California privacy act information posted in the guests’ view.”
Last Word 
While adjusting can be uncomfortable at times, putting these changes in place sets a strong foundation for your franchisees to succeed through these times. It also gives your franchisees confidence in the system overall.
*Note that all that is written above are suggestions only, and do not qualify as advice. Please advise with local professionals for detailed recommendations.


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How Pivoting Your Franchise Operations will Create Success

By | COVID-19, Events
Pivoting Franchise Operations

Date: Thursday, June 18 at 3:00 PM ET
Guest: Rachel Shemuel, Field Trainer, Panago Pizza
Link: Register Now

Succeeding in this new environment is possible, but it requires a different approach. Everyone needs to shift their mindset, and pivot operations. There are several dynamic examples across the franchising community, and now is the time for us to come together and learn from each other.

  • Franchisors are pivoting to act more as coaches, instead of cops and increasing the number of touchpoints with franchisees.
  • Franchisees are leveraging procedures and tools to make sure to keep everyone safe.

Join Rachel Shemuel, Field Trainer at Panago Pizza, Dean Hatzitheodosiou, Sr. Director of Business Development at FranchiseBlast and other special guests to learn about how to use data effectively to navigate the new environment, and how communication is your best ally.

We also explore Virtual Visits and how this can be leveraged in an era of travel restrictions or the potential of second or third waves of the pandemic.

This will be a laid-back, video webinar with an opportunity for questions at the end. Register now.



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Franchise Operations: Are You Ready for Virtual Visits?

By | COVID-19

The global pandemic has affected franchise operations heavily. How does a franchisor pivot into a new world where travel restrictions limit or even prohibit onsite visits? The answer is the virtual visit.

Franchisors have long sent Franchise Business Consultants (FBCs) to visit their franchisees, both to ensure operational compliance and also to coach. The FBC would have a conversation with the franchisee and talk about their priorities and how the franchisor can help achieve their goals. The most common output of these visits is a field audit report indicating a few areas of improvement.

Since the COVID-19 pandemic, the key to operating is to shift focus from compliance to coaching. The good news is that franchising has been moving in this direction for the past few years.

In this article, we highlight the three stages of this transition and how you can implement them in your franchise.

As a coach, the simplest way you can execute a virtual visit is to set up a scheduled call with your franchisee on one of the many communications platforms available such as Zoom, Google Meet, Apple Facetime or Microsoft Teams. Then, you can see both the location (for compliance) and the franchisee (for coaching).

Seeing the location gives you the opportunity to review certain elements remotely. You could theoretically go through your previous compliance checklist this way, but this would be counter-productive. Reviewing every single standard from your long compliance checklists is not only demotivating for the franchisee, it’s also ineffective as the visit is announced. Instead, gaining visibility in a few key elements which were historically problematic (and a few spot checks outside of those areas) would drive better conversations while saving time.

For compliance, the key is to introduce self-assessments they can fill out on their own. Compliance is about protecting everyone’s investment: it should not be neglected. Request picture proof from franchisees on a few critical standards and make this a part of the work you request from them. You can equip franchisees (and their store managers) with the right tools to give you enough insights about their operations. At FranchiseBlast, we include tools to improve the accountability of this process via polling or self-assessments.

For coaching, seeing the person lets you have a deeper connection with the individual, which is required to build enough trust to impact their performance. In your coaching session, you should ask them questions like:

  • What’s keeping you up at night?
  • What areas would you like to improve?
  • How can I help you achieve your goals?

In the conversation related to the last question, you can talk about initiatives they could be doing to achieve their goals.

One challenge VPs of Operations will face is that they will have little to no visibility about the coaching sessions. Sure, they could be recorded and stored, but that’s hardly actionable and they have no way to keep the coaches accountable.

The solution is to request that FBCs document these interactions. This opens the opportunity to use the same tools previously used for audits, but with a new questionnaire tailored for these coaching interactions. Questions should guide the FBCs in touching the key areas of the business you’d expect them to talk about such as the following:

  • marketing
  • food costs
  • labor
  • training

For each area, a few notes can be taken about the current situation, the objectives for the next quarter and what initiatives will be put in place to reach those goals. Because all their interactions with their franchisees, the VP of Operations can gain holistic insights about how the franchisor is helping each franchisee.

To sum up, virtual visits can be achieved very simply with communication tools and recorded with a mix of audits, self-assessments and franchisee polls. Franchisors gain visibility into unit-level operations plus introduce some accountability for the coaches by forcing them to document their interactions.

The process then becomes:

  1. Franchisees and FBCs connect on a recurring basis with visual communication tools
  2. Franchisees fill out self-assessments for compliance
  3. FBCs document their interactions, with the most important one being the coaching session

Stage 2: Moving to data-driven coaching sessions

The process described in Stage 1 is the beginning of the shift from compliance to coaching. It is very simple and easy to implement in any franchise. However, its simplicity does potentially add some inconsistencies across coaches.  The conversations and plans the franchisee is making with their coach are heavily impacted by their gut feelings and the data that they gathered was ad-hoc in nature.

It is in this stage that franchisors invest in putting processes and technologies in place to generate a Franchisee Scorecard. Scorecards aggregate information from various sources (Sales, Marketing, Loyalty, Controllable Expenses, Audits, etc.) into a single document which is reviewed by both the franchisee and their coach. The great thing about a scorecard is that it benchmarks each unit with the group, highlighting the areas of opportunity.

Most FBCs already look at data with the franchisees, but a scorecard streamlines the process to make their work simpler. It also standardizes which metrics are observed by all coaches, and for which specific action plans can be developed. As an example, one may observe sales are fairly average, but the average transaction amount is lower than everyone else, indicating an opportunity to coach on upselling.

Once the franchisor puts in place the processes to ensure the scorecard is always accessible and updated in a timely manner, the collaborative process looks like this:

  1. Franchisee fills out a self-assessment indicating what they’d like to discuss in their next coaching call. This lets them voice their concerns ahead of time, and the FBC can be prepare adequately.
  2. On the coaching call, the scorecard is the conversation piece. If a weakness is observed in one area, such as Customer Satisfaction, both can drill down into specific online reviews to learn more about the area of opportunity.
  3. The action plan is developed and recorded by the FBC for accountability purposes, much like in Stage 1.

Stage 3: Rolling Out More Formalized Business Planning

Once franchisors are comfortable in Stage 2, they seek a way to more actively drive change. Stage 2 helps document the action plans, but these are simply snapshots of a conversation. There rarely is any direct follow-up on these plans between interactions.  This is where business planning comes into play.

A business plan is a living document that gets continuously updated through a period, such as a quarter or a year. It includes the objectives that were collaboratively defined; these are motivational targets. For example, they could be to reach a level of performance so strong that the franchisee is ready to open a second unit or decrease variable costs so that the franchisee can afford to pay for their kids’ college education.

Objectives are broken down into key results which are measurable. Key results are metrics that you can measure but you cannot directly control. For example, a key result could be to increase the average transaction size to $15.00. Another could be ensuring labor costs are less than 25% of sales.  By defining a set of specific metrics, the success or failure to meet the objective becomes clear.

Finally, once your targets have been defined you can develop an action plan to reach those targets: these are initiatives. These are activities or tasks that you know you can perform for example:

  • roll-out touchless payments
  • build a cashflow model
  • train staff on upselling procedures
  • hiring a new manager

These initiatives represent your best guess about what you can actually do to reach your objectives.

franchisee comeback plans 3

Building the plan collaboratively with the franchisee is key in this context, as they must agree with the objectives, believe the plan is achievable and align with how to measure success. Of course, franchisors can and should bring a standard plan to the table and tweak it to fit each franchisee, but it’s key that the franchisee buy into the plan. It should focus on what is most important, helping elevate their thinking from working in the business to working on the business.

The next step is to perform recurring check-ins on the plan. By doing so, you can knock off initiatives which are completed and perhaps add new ones if the key results aren’t moving in the right direction. Check-ins are important to keep the plan alive and to highlight what’s important instead of always focusing on the day-to-day emergencies.

Once the franchisor has as standard business plan template aligned with their own strategic objectives, the process thus becomes:

  • Franchisees fill out a self-assessment indicating their desired conversation topics
  • A coaching session occurs where the business plan is developed collaboratively
    • Some key results may come directly from the scorecard
    • Some initiatives may be to get staff to fill out self-assessments on a recurring basis
  • Recurring (such as monthly) check-ins occur (likely collaboratively, but perhaps franchisee-driven)
  • At the end of the period, a post-mortem is created to review the progress made and build the next plan.

The Virtual Visit Ladder: What Heights Do You Want to Achieve?

As you can see, each stage here builds on the successes of its predecessor.

  • Stage 1 augments the toolkit to include self-assessments in addition to classic audits.
  • Stage 2 weaves in data-driven insights via franchisee scorecards.
  • Stage 3 moves from snapshots to a full-blown business planning to drive growth.

To get started with virtual visits, it’s time to move away from doing pure audits. Your first task is to begin documenting all types of interactions you’re having with franchisees. Then, you can slowly roll-out self-assessments in order to equip your franchisees with tools to improve themselves.



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Virtual Visits in Franchising

By | COVID-19
Virtual Visits in Franchising

FranchiseBlast works with over 100 franchisors, and many are facing the same dilemma:

  • Franchise Business Coaches (FBCs) Can no longer travel due to governmental restrictions.
  • Fewer FBCs to support the network overall.

Virtual visits have been helping franchisors meet this challenge. In this post, we will go through some options for the virtual visit, and how it can benefit your franchise system.

Rethinking the Field Audit

FranchiseBlast is known as a tool for field audits across the franchising community.  With this app, coaches go through the compliance checklist that you’ve developed.  With this powerful system in place, one thing you can do is identify what your system-wide weaknesses are.

You can also discover activities that are a weakness across the system, such as “suggesting promo items”, for example. As a result, you will coach your network more effectively as a whole and train them on upselling skills to address the global weakness.

In the new environment, these compliance checklists may not apply as directly.  As a result, franchisors are creating questionnaires that are coaching-driven and are easily executed remotely. For example, franchisors can have a check to see if franchisees have completed a specific training or are following through on a specific marketing campaigns.  With this kind of audit, the coaches do not need to be in the field and, if applicable, franchisees can upload relevant pictures.

Franchisee-Driven Actions

For compliance specifically, franchisors are training franchisees on self-assessments – which is a way for a franchisee to audit themselves. If the franchisee uploads pictures, such as signage around physical distancing, franchisors can easily browse photos all at once to save time using the picture feed feature.

The challenge with self-assessments, is that they are passive in nature in that the franchisor is waiting on individual units to launch an audit. Conversely, with polling, you can say:

“Have this questionnaire filled out by everybody.”

The system then pushes out the survey. The franchisees and crew don’t need to be logged into the platform to fill it out and you can track who’s filled it out and who has not.

Data-Based Decisions

The information above helps with the compliance aspect of the FBC’s work but there is an ongoing trend towards coaching. All coaches know that you need to inspect what you expect. The franchisee scorecard, helps franchisees make data-driven decisions.  You can measure elements such as:

  • Sales
  • Percentage of online orders,
  • NPS scores
  • Google Reviews
  • Labor costs
  • Food costs

Franchisors define these indicators and can develop leaderboards, and coach franchisees where they are struggling.  By looking at this dashboard of the holistic view of the health of that unit, you can develop an action plan.

Adapting to the New Operating Environment

To pivot to the new operating environment, some franchisors are creating business plans. Imagine that you want to define a plan with the franchisees to adjust, including the goal:

“You need to keep your labor costs under 20%”.

Together, you define relevant initiatives at the start of the quarter, or start of the year. On your future calls, or on those virtual visits, go in and perform a check-in. This brings back up that plan to say:

“Okay, we need to pivot to the new operating environment.  Here are the things we said you would do, did you implement the new workflows?”

This is a straightforward example, but it an be as simple or sophisticated as you want it to be.

Conclusion

So overall, FranchiseBlast has a suite of tools that help with both compliance and coaching while performing the virtual visit.  The FranchiseBlast team is happy to discuss the best set of modules for you and your unique environment.



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Which Tool is Right for your Franchisee Comeback Plan?

By | COVID-19, Franchise Relationships

Much of the franchising world went on lockdown in the Spring of 2020. As franchisors set their sights on reopening the economy, we received a few requests on which of our modules (field audits, self-assessments, polls, projects, business plans, etc.) are the best to use for their scenarios in the new world.

Overview

Coach Interactions

If the coaches are driving a short interaction, call, audit or review with a franchisee, you should use a field audit. This is the baseline tool for coach-driven scenarios.

The exception is if you want to record an interaction and keep it confidential – meaning you do not want the franchisee to see it. In that case, you would use a comment in the info depot or on the franchisee’s record within your system. 

Franchisee Interactions

If the franchisee is the one who is initiating the interaction, then the baseline is a self-assessment – an audit where the franchisee is empowered to fill it out themselves.

Conversely, if the interaction is critically important and the franchisor needs to have visibility into the result for risk mitigation or other legal purposes, and you will be requiring all units to fill it out, you should launch the a poll. This adds accountability that everyone fills it out. It is especially helpful if there is an expectation to fill it out on a recurring basis.

Mixed Interactions

If you are doing an interaction that involves many stakeholders over a process that takes several months with a guaranteed outcome (such as a grand reopening), you should be doing a Project that creates tasks for accountability.

If the coach is defining a strategy collaboratively with the franchisee, and you can setup a process to review how they are doing versus this strategy over several months, you should use a Business Plan.

Sample Mini Case Studies

Protective Gear Installation

Problem: We want to make sure franchisees have installed new plexiglass and signage for reopening procedures. We are 100% sure that the franchisees can follow through with this.

Solution: A self-assessment if franchisees are self-starters and a poll if accountability is a top concern.

Operational Changes

Problem: I want to make sure franchisees are ready to follow the new operational procedures for online ordering and delivery.

Solution: A self-assessment if franchisees are self-starters and a poll if accountability is a top concern.

Remodelling to Support Online Ordering and Pick-up

Problem: Each unit will need to be remodelled to support online ordering.
Solutions: Self-assessment if your goal is check the completion of it. It could also be a Project if it is a lengthy complex process involving many teams.

Business Continuity

Problem: I want to make sure my franchisees survive the crisis. As a way to support them, we’ll be talking on a monthly basis.
Solution: If you just want to record the interactions and take the pulse of the franchisee, use a Field Audit. If you are willing to get more involved and formal, Business Plans are appropriate. The latter is a living document that is evolved as you progress through the various initiatives defined in the plan.

Last Word

Supporting franchisors and franchisees with different scenarios around opening in each system, and across region requires agility and flexibility. If this post has been supportive to your efforts, feel free to post on Social Media.



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Webinar: Franchising Toolkit to Win

By | COVID-19, Events

Date: Friday, May 8th, 2020 at 11:00 AM.
Registration: Get Your Seat Now

Join host Sally Facinelli, CFE, and other franchise experts to discuss the toolkit needed for businesses to re-engage their franchisees, employees, and customers.

Topics include:

  • Brand image and messaging
  • Marketing toolkit
  • PR and how to support franchisees in their local market
  • Loyalty programs: keeping loyal customers loyal
  • Plan for your franchisee come back objectives

Confirmed Speakers:

  • HotDish Advertising – Dawn Kane
  • 919 Marketing – Graham Chapman, CFE
  • Fishman PR – Sherri Fishman, CFE
  • POLN8 – Tom Epstein, CFE
  • FranchiseBlast – Jason Kealey, CFE

Register for the webinar here



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Franchisee Comeback Plans

By | Business Plans, COVID-19
Are you preparing to help franchisees make a big comeback once the lockdown ends? We work with over 100 franchise brands and this gives us a unique perspective on what different franchisors are doing to help position their franchisees to thrive as the economy slowly returns to normal. Using these ideas, you can overcome the hardships brought forth by the COVID-19 pandemic.

Comeback Plan Overview

We’ve prepared a generic franchisee comeback plan to serve as a basis for your own efforts.  Let’s go through the plan together to explain the various elements and complement the work you’ve already done. To put some structure around this comeback plan, let’s think of it like a standard business plan a coach would collaboratively define with their franchisees.
To come back from this crisis, there are 4 key objectives that we define here in this comeback plan:
  • You need to be able to weather the storm financially
  • You must pivot to the new operating environment
  • You aim to keep your employees and customers safe
  • You want to bounce back rapidly via sales and marketing initiatives
To do this, we are using the Objectives and Key Results (OKR) methodology. We don’t need to go deep in the terminology to explain our plan, but let’s at least explain these concepts.
  • An OBJECTIVE is your goal and aligns everyone in simple terms
  • KEY RESULTS are how you measure your success; you can’t control this outcome
  • INITIATIVES are activities trying to achieve objectives, which you can control 100%

Objective #1:
Weathering the Storm Financially 

When we are talking about weathering the storm financially – the goal of the franchisee is to stay in business. The pandemic brings a lot of uncertainty, making cashflow management difficult. This will likely be the main conversation topic between the coach and the franchisee. When you look at this, it begs the question “how do you measure if you weathered the storm after the quarter”? The pandemic brings a lot of uncertainty, making cashflow management very difficult. All of the following Key Results are samples only, and the values themselves should be customized for your business.
  1. 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.
  2. 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.
  3. 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.

In terms of initiatives, these are things that you can do concretely:
  1. Develop cashflow model with three scenarios (optimistic, pessimistic, realistic)
  2. Perform weekly cashflow review
  3. Apply for government relief
  4. Negotiate relief with landlord, suppliers and lenders
  5. Negotiate with bank to assist with cash flow by increasing the line of credit
  6. Develop strategy for worst case scenario (equity investment from a new partner, divestment to multi-unit operator or shutdown)
These activities are within your span of influence. You may not have 100% control over whether or not you will get government relief but you know that you can apply. If that initiative fails, then you may need to revisit your plan and see what other initiatives you can do to stabilize your cashflow situation.

Objective #2:
Pivot to the New Operating Environment

The world has changed, so we have to take an honest look at how the world is today, and you are going to have to adapt. Restaurants are letting customers order ahead, or arranging curbside deliveries. Service franchisors are doing remote meetings instead of face-to-face. Some stores are changing their layouts to accommodate new practices such as having a new cooler for meals while they wait to get picked up. No matter what your business, it has to adapt since this is a new world.
Key results associated with this include:
  1. All employees have completed the franchisor’s new training course – checking that everyone is aligned with your new operational processes
  2. 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
  3. Keep COGS under 33% of sales – you may need to change how you operate to reach this goal
Initiatives connected to these Key Results include:
  1. Attend franchisor webinars / watch franchisor videos
  2. Implement franchisor’s new workflows to be aligned with the new environment
  3. Define new work schedules based on cashflow scenarios (reduced hours/staff, etc.)
  4. Define reduced product offering to minimize inventory carry
  5. Update product availability across all online platforms
  6. Consider grocery staples and produce baskets additions to meet supplier minimums
  7. Perform daily sales/inventory reviews and compare to cash flow models to be more efficient on inventory ordering
Although there are some businesses, such as those in pizza, who are not losing a lot of business, most have to adapt to the new situation. Think about what changed in your business and how you can determine if a franchisee is ready for the new world.

Objective #3:
Keep your Employees and Customers Safe 

Third objective is about keeping people safe – that is key. At the highest level, if you don’t do this, you are going to get in trouble. People are posting on social media about businesses that are laggards in this regard. This damages the brands reputation, even if it is just a matter of one or two franchisees. On top of that, there are lawyers driving around looking for employers to sue, since employees do not feel safe. This is a risky environment for business people.
Key results that could help you measure the objective include:
  1. 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
  2. Have all employees perform new COVID-19 training material – specific procedures related to sanitization and such
Initiatives that support keeping everyone safe include:
  1. Install new recommended signage / protective barriers / sanitizing stations
  2. Train staff on new COVID-19 procedures (cleaning, disinfecting, social distancing,  recognizing symptoms, etc.)
  3. Perform check-ins with staff to ensure they feel safe at work
  4. Monitor your franchisor’s communications daily to stay abreast of best practices
  5. Communicate with local health to learn about local regulations which apply
Keeping people safe is challenging for franchisors as they aren’t necessarily able to visit the units during the lockdown. They must influence franchisees who actually execute these best practices to keep people safe. Fortunately, most franchisees are welcoming of these initiatives and see value in their franchisor helping them implement best practices.

Objective #4:
Bounce Back Rapidly Via Sales and Marketing Initiatives

Overall, we are going to go through a recession. As a result, people will be strapped for cash and some businesses are going to be in trouble. It has been proven that doing marketing during a recession or a downturn helps during the recession and after. There are lingering results of consistent and effective sales and marketing. That market share that you can capture will be important. Although businesses want to control variable costs, the cost-cutting should not occur in the marketing area.
That being said, you want to be delicate. You want to make sure that your marketing initiatives are in tune with the demands in the marketplace. You cannot be tone-deaf or too aggressive and you have to operate with tact.
Key results associated with this include:
  1. Achieve 250 marketing campaign conversions – measuring the success of whatever pandemic-aware campaign you are running
  2. Add 250 new customers to our loyalty mailing list – a bigger list you can market to on a continuous basis
  3. Receive 250 new downloads of our app – expanding the list of people you can reach with promotional offers
  4. 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.
Initiatives that support the Sales and Marketing objectives include:
  1. Review tone and messaging of the franchisor’s proposed marketing campaigns
  2. 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
  3. Perform a marketing campaign on social media
  4. Perform a direct mail campaign
  5. Perform a PR campaign; contact 3 local media outlets to pitch them the story.
  6. Perform an email blast campaign to loyalty/app members
  7. Perform weekly marketing ROI analysis and course correct if needed

Operationalizing Your Plan

Overall, the franchise comeback plan is defining the key results, the initiatives and objectives that you will be reviewing on a recurring basis as a franchisee and a coach. Typically we are creating annual and quarterly business plans. Here is what the comeback plan looks like in FranchiseBlast:
franchiseblast comeback plan 1

Here, you can see a summary of the objectives, along with a chart showing whether or not they are on track.

franchisee business plan 2

They Key Results and Initiatives are also seen, aligned with their relevant objective.

franchisee comeback plans 3

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.



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How COVID-19 Shot Franchising Three Years into the Future

By | COVID-19, Franchise Relationships

Before the world was hit by a pandemic, I had been thinking about how franchising will evolve over the next five to ten years. In particular, I had been thinking about the evolution of the role of the Franchise Business Consultant (FBC), given how over 100 franchise brands rely on our technology for their franchisee coaching. 

In chatting with some franchise family, I realized that franchising had been shot three years into the future, figuratively speaking. I think the pandemic will accelerate certain trends and wanted to share these thoughts with you. That being said, I encourage you to challenge my ideas and help refine this projection of the future of franchising.  

Dynamic #1: Weaker Businesses Are Going to Close 

It is sad to say, but several businesses will not make it through the current quarantine. I’m an optimist with regards to what will come after this pause, but short term I am a realist that several businesses are just not strong enough to survive due to weak margins and poor cash flow management. This is especially true in the restaurant space, where over 11% of restaurant operators expect to permanently closed within the next 30 days 

However, with the government interventions, I believe this will be stretched out over a longer period. Several businesses will survive the quarantine, but the wheels will have been set in motion to force their closure within a year or so. Businesses that will be so strapped for cash will be unable to market or maintain operations to a decent level, gradually eroding their business. Not only will consumers be more cautious about their expenses (thus fewer customers to service), the ones which remain will visit the businesses marketing more aggressively.  

Dynamic #2: The Rise of the Multi-Unit Operator 

Multi-unit operators have been growing for years and now own more than half of all franchise units. Economies of scale help make them sustainable businesses even with lower unit-level margins. Well-capitalized operators will scoop up the units that are having trouble staying afloat but still have potential to turn a profit. This will accelerate. This is perhaps the most profound trend with regards to the future of franchise coaching. 

Cash will continue to be cheap with very low interest rates continuing to facilitate their expansion. Post quarantine, many entrepreneurs will be looking for an out and they will be acquired at greatly reduced multiples.  

For the franchising business model, the combination of dynamics #1 and #2 will be a positive as larger systems will be better equipped to assist their operators in surviving than the regular “mom and pop shop” down the street. The overall diversity in the ecosystem will be reduced, but out of all the units that weather the storm, the overall proportion of franchised and corporate chains will be increased.  

Dynamic #3: Changes in the Talent Pool and Discretionary Income  

Overall, with all these units shuttering, franchise businesses should see a return to equilibrium with regards to the current labor shortage. This will help them put better staff in place, should reduce employee turnover and thus improve margins due to less time spent retraining.  

However, over the next 12 to 24 months, higher unemployment means that there will be less discretionary income to spend and that may negatively affect certain franchise verticals. This impacts the strategies business owners will need to put in place to attract customers.  

Dynamic #4: Increased Focus on Operational Efficiency 

Businesses will be put under greater pressure to maintain profitability. They will look at ways to run a tighter ship by simplifying their operations, investing in technology and cutting costs where possible. The ability to secure loans at low cost will accelerate the transition to new technologies.  

As an example, the pandemic will speed up the migration to order ahead in the restaurant space. The consumer will have had increased exposure to the technology during the quarantine. Furthermore, ordering on one’s device is much safer in the context of a pandemic than utilizing self-serve kiosks such as the ones installed by brands such as McDonald’s over the past few years, while offering up the same reductions in labor costs.  

Overall, this is good news for suppliers in the franchise space who focus on operational efficiency. The next few months will be tough for everyone in franchising, but there is light at the end of the tunnel. 

What Should a Franchisor do over the Next Two Years? 

A franchisor should align their Franchise Development teams towards conversions and resales. There will be many struggling single-unit operators looking for a way out (both in your franchise and outside). Prepare yourself to be more appealing for multi-unit operators. In certain verticals where your typical franchisee was laid off from corporate America, then you may see growth in greenfield locations but otherwise net new development may be reduced.  

Franchise marketing should focus on being there for their franchisees with a big push once the quarantine ends. It is counter-intuitive but it has been demonstrated that those who market aggressively during a recession not only outperform their competitors during the recession, but also afterwards thanks to the market share they have gained. With all these unit closures, it’s your chance to capture the audience who cannot remain at status quo.  

Franchise operations will unfortunately be taking a big hit in the short term. The C-Suite will want utilize whatever funds that are available to keep the development and marketing engines purring for the long-term viability of the company, and ask operations to take a bigger share of the cost cutting initiatives.  Overall, we will expand on this further in this article but we’ll see some operations teams abruptly cut in half whereas others will want to utilize technology to cut travel costs and make their coaches more impactful. 

What will Happen to the Role of the FBC over the Next 5 to 10 Years? 

The role of the FBC today is twofold. First, the coach ensures operational compliance. Second, they help the franchisees to improve performance. A decade ago, most FBCs were simply auditors. Today, every franchise is on a spectrum from cop to coach. Over the next decade, we believe the cop part of the job will have been automated and drastically streamlined. 

Compliance is important to protect everyone’s investment (especially in an age where social media can instantaneously kill your brand), but franchisors realized that their long-term viability required franchisees to be profitable, not just growing top-line revenue.  

Additionally, it is interesting to note that the average FBC works with 30 franchisees; and that is franchisees, not units, because an FBC maintains relationships. In a system with a higher density of multi-unit operators, you will find the average FBC oversees a greater number of actual units. The more sophisticated the operator, the higher-level the conversations. They are not asking an owner who runs 50 restaurants to change a lightbulb, they are talking about talent development for his next 5 units.  

Where does that lead us over the next 5 to 10 years? 

Here is what the automation of the cop part of the role will look like so that coaches can focus on relationships:    

  • Why bother going to visit a unit to check temperatures of various equipment? IoT devices already exist that broadcast all of this information into a central cloud and alert you when a refrigerator goes down and can automate your line checks.  
  • You don`t need to visit to see proper marketing campaign roll-out or cleanliness in a unit as self-assessments and webcams solve this problem. 
  • Artificial Intelligence is already used to ensure restaurant quality, ensuring things like portion control and adherence to recipes with picture taking, especially in the pizza category  
  • You won’t be monitoring cashier transactions as much, as the orders will flow through the consumer’s devices – but those non digital transactions can still be monitored by a microphone and some AI to compliance to upselling procedures  

Overall, it is not far fetched to think you can automate the most important base compliance aspects of a franchise.  

The coach part of job will remain, and will be more impactful than ever before in the following ways:   

  • The emotional connection of an owner with their coach will heighten in importance. The coach will understand the deep underlying motivations of the franchisees on a personal level. 
  • Travel will remain for that personal connection, but will be greatly reduced and replaced with technology such as Skype or Zoom meetings.   
  • Less travel time implies more coaching time, which implies more franchisees per coach. Tack on the impact of multi-unit operator and you’ll end up with more units per coach overall.   
  • Coaching requires lots of data analysis to figure out the primary areas of opportunity. The good news is technology will have streamlined and integrated lots of these data signals into a single platform to make it easier to digest.  
  • Some new platforms will be born out of the merger of many point-solutions in use today (the POS company will handle your POS, your digital menu boards, your order ahead, your marketing campaigns, etc. ) to make it easier for the coach to gain access to metrics in a timely manner.   
  • Artificial intelligence will analyze each franchisee`s weaknesses and provide insights about action plans to help address those weaknesses based on effectiveness of past suggestions by other coaches for these same issues. In essence, this will bake in the franchise system’s best practices into an actionable platform.  
  • There will be a rise in specialists at the franchisor level to assist generalist coaches. The coach will be able to tap into franchisor resources that are specialized in certain things (marketing or finance for example). The overall complexity of these tasks has increased so much over the years that the job is better executed centrally by a pro than distributed onto franchisees who are running their businesses. Additionally, it simplifies the unit-level operations and improves margins to shift these responsibilities.   

What do you think the future will look like? 

The pandemic will have a profound impact on our lives. That said, I personally don’t believe doomsday thinkers that think that people will suddenly stop going to restaurants or out for snacks. I think fundamental currents that were already under way will be accelerated due to the pause everyone will see in revenues for a few months.  However, I humbly admit that this is just one point of view and look forward to hearing your opinions and counter-arguments.  



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COVID-19 Checklists

By | COVID-19

As the situation with COVID-19 continues to evolve, we are responding to requests for checklists from our customers. As a result we have created a collection of resources for free for anyone to download.

We have prepared checklists to help you navigate the Coronavirus in your franchise. This includes:

  • American: Center for Disease Control and Prevention(CDC), Occupational Health and Safety Act (OSHA).
  • Canadian: Government of Canada and the Canadian Center for Occupational Health and Safety.

These are available in Excel, PDF and within the FranchiseBlast library. Download now.

USA

Coronavirus Disease 2019 (COVID-19)
Author: Center for Disease Control and Prevention

  • Key Sections
  • For Managers
  • How to clean and disinfect
  • Soft surfaces
  • Electronics
  • Laundry
Sample Recommendations
  • Educate workers performing cleaning, laundry, and trash pick-up to recognize the symptoms of COVID-19.
  • Provide instructions on what to do if they develop symptoms within 14 days after their last possible exposure to the virus.

Guidance on Preparing Workplaces for COVID-19
Author: Occupational Safety and Health Act (OSHA)

Key Sections

  • Steps all employers can take to reduce worker’s risk of exposure to SARS-CoV-2
  • Classifying Worker Exposure to SARS-CoV-2

Sample Recommendations

  • Discourage workers from using other workers’ phones, desks, offices, or other work tools and equipment, when possible
  • Prompt identification and isolation of potentially infectious individuals is a critical step in protecting workers, customers, visitors, and others at a worksite.

Canada

Cleaning and Disinfecting Public Spaces (COVID-19)
Author: Government of Canada

Key Sections
  • Choose a product that cleans and disinfects
  • Create a cleaning procedure

Sample Recommendations:

  • Surfaces frequently touched with hands are most likely to be contaminated. These include doorknobs, handrails, elevator buttons, light switches, cabinet handles, faucet handles, tables, countertops and electronics.
  • Use damp cleaning methods such as damp clean cloths, and/or a wet mop. Do not dust or sweep which can distribute virus droplets into the air.

OHS Fact Sheet on Coronavirus

Author: Canadian Center for Occupational Health and Safety

Key Sections
  • What can a workplace do?
  • What are the recommendations to prevent transmission of a coronavirus?
Sample Recommendations
  • Removing magazines and papers from waiting areas or common rooms (such as tea rooms and kitchens).
  • Making sure ventilation systems are working properly.

If you have any questions, please feel free to reach out.