Long Term Planning

The Covid-19 pandemic has presented unprecedented challenges. It erased sales for both franchisees and franchisors who had often-substantial expense commitments. Pressure mounted daily and, despite government support, many lost financial strength and faced emotional challenges.

During this time, many New Zealand franchisors showed incredible leadership with increased direct assistance and guidance to franchisees; new products and technology innovations; emotional and wellbeing support; great franchisee engagement; and, in some cases, franchise fee relief. Many franchisors worked longer and harder than ever, showing tremendous commitment to their franchisees.

Yet considerable challenges remain: dealing with landlords; continually changing operating requirements; staffing and financing considerations; ongoing suppressed demand and sales.  Pre-Covid-19, a franchisor’s work was never done – now there’s even more to do. But focusing on the immediate challenges could risk neglecting the underlying drivers of success. Here are five important areas for franchisors to focus on to ensure and enhance long-term franchise network performance and sustainability.

1. Optimise franchisor governance. Unprecedented times require an assessment of your governance structure, be that a formal board, advisory board, coaching or less formal format. Given current circumstances, who do you most need to have on your team?

2. Update franchisor business plans. Although we advocate scenario planning, no-one we know planned for a pandemic with zero sales. At this time, franchisors must revise objectives, set priorities and actions. They must also consider a range of future scenarios, and ensure they have appropriate contingency plans in place.  

3. Formalise your unit-level business model. Many franchisors have made changes and adaptations during the lockdown and re-establishment period. Some changes will continue, outdating existing policies and procedures. It is important to ensure that Franchise Manuals and Training Programmes are updated to reflect the revised model.

4. Review your franchise structure and management. Many franchisors would benefit greatly from a formal review of their total franchise system structure and management approach. This can also blend insights from franchisor and franchisee performance and teams. A formal review is a considerable undertaking when you are time poor; however, the present situation is a turning point – and when creating new plans, it’s best to work with as much context and insight as is practicable.

5. Continue strong franchisee communication and engagement. During lockdown, many franchisors communicated with franchisees much more regularly and with more valuable time-specific information and resources. They embraced technology and increased personalised support via new technologies. Many have increased engagement with their Franchise Advisory Councils as they devise strategies and navigate needed changes. This needs to continue – great communication increases mutual understanding, harnesses important insights, provides support, and can build trust, satisfaction and loyalty.

‘Franchize Consultants helps franchisors maintain the big picture and focus on the things that matter long-term, for both franchisor and franchisee performance,’ says Dr Callum Floyd, Managing Director of Franchize Consultants. ‘For more information, call me or go to our website.’   

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