The coronavirus pandemic has ravaged its way through the world, affecting every facet of people’s lives. The U.S. economy has taken a blow and business owners are trying to navigate their way out. Franchise owners are working to find a way to stay safe while keeping their businesses from becoming a total loss to the recession.
Some business owners were just about to expand to more locations, take on more employees, and target new areas, but now they are forced to change their plans. However, this downturn doesn’t have to mean the end of a business. There are a few things franchisees can do to try and protect their hard work and survive the economic crisis.
Open Communication
It is important to lead with communication on all fronts. Make a list of the people who need to be in the know at all times. Stakeholders and key players such as important customers should be communicated with via a designated spokesperson. This could also lead to more ideas on how to handle the situation and good moves for the business going forward. Take as much uncertainty out of the situation as possible.
Communicating with other important players such as landlords, property managers, and vendors is also vital. While the uncertainty is going to be nearly impossible to eliminate, setting the communication expectation early and expressing intent to come out on top at the end is still worthwhile. Franchisees should also be prepared to talk to lenders about debt relief early on, as there will be a long line to get in touch.
Evaluate Spending
Are there current projects going on that can be put on hold? A pandemic induced economic crash is not the time for new construction projects or expansions that are not integral to the minimum functions of the business. Place any projects on hold that are able to be paused in order to save some money and stress at the moment. Evaluate what must continue and plan a path forward that will minimize the financial burden to the franchise.
Know Your Policy
Many have business interruption coverage, but what is defined as an interruption can be determined by the broker. You should consider contacting a lawyer and be prepared to argue the need for enacting this coverage at this point in time. Being in touch with an attorney throughout the entire downturn will be important as issues may arise where defending the franchise will become necessary. Attorney Jason Power of Franchise.Law says, “The best thing you can do is be in touch with your attorney throughout the pandemic. They should be in the know about what you are doing so they have an accurate picture of what is happening with your business.”
While going through an economic crisis like this pandemic, it is important to gain as much clarity as possible and relay what is known to important stakeholders moving forward. Keep everyone on the same page while making decisions and evaluating new information.
