How To Anger Franchisees (Or Not) In A Pandemic – Part 1 | Franchise News
The one-year anniversary of annus horribilis, brought on by COVID-19, seems like a good time to reflect on the disruption in franchisee-franchisor relationships. From a year of reporting, here are four common conflicts that franchisees have had with their franchisors, along with ways to avoid them.
1. Say the sentence: “We are all in the same boat.” The ubiquitous phrase started off as a well-meaning sentiment, voiced by nearly every franchise executive we interviewed in the first months of lockdown last year. The problem came when it just wasn’t true.
As franchise executives walked to their home offices and Zoom calls, for the most part franchisees had to fend for their stores, restaurants, or gyms in a grim battle for survival.
“I think franchisees are generally not happy with what they get,” said Kristy Miamen, lawyer at Dady & Gardner, in an interview last April, adding that it depends on the sector and it depends on the resources of the company. franchisor. .
“Franchisees are the most disappointed with franchisors who have more resources to provide relief, and they are not. Large and large systems can grant royalty deferrals versus relief,” for example, the only difference between the packages being the time that the franchisees have to reimburse the deferrals. “Overall, franchisees believe that more can be done in some systems.”
She said Restaurant Brands International, the parent company of Burger King, Popeyes, and Tim Hortons, was an exception to the sea of similarity she saw in big-system relief offerings. “They do really creative things,” she said, citing a March 30, 2020 announcement that RBI was advancing cash payments and rebates totaling $ 70 million to North American restaurateurs.
A few other notable franchisors, according to my interviews: Batteries Plus Bulbs for the CEO’s daily “war rooms”, sharing real-time information about what was selling and where and getting those products to the right place. Tune Up-The Manly Salon’s CEO for file a lawsuit challenging the constitutionality of Texas shutdown rules. The CEO of Authority Brands for daily conference calls, including how to apply for a Paycheck Protection Program loan “A lot of our franchisees actually got the money before it ran out,” said an American Swimming Pool Co. franchisee of the latter.
The bold, straightforward, practical and money-oriented actions were praised. Cookie-cutter feelings and meaningless actions (like postponing royalty payments when stores have been closed, thus not generating sales on which the royalties are based) have not been.
2. Ignore the KISS rule. Keep It Simple Stupid has never been more important than during the worst year ever. Yet some franchisors have deployed elaborate cleaning protocols that they never changed, even as more was learned about COVID-19 (such as its relatively low risk of transmission via surfaces).
Operators have complained about McDonald’s 59-page guide to the pandemic as being too expensive and too strict, for example. The Wynn Hotel in Las Vegas had a protocol of over 100 pages, for another, and there were many more. As Subway franchisee Keith Miller inelegantly put it in March of the franchisor’s complicated protocols: “Someone’s got a pimple on their ass and five people need to be quarantined.”
Other franchisors dropped their offerings during COVID-19, such as Edible Brands and its rollout of nine total subcategories last year, including an in-store BakeShop, FruitFlowers, an edible ink line called Printible, and even an edible music Platform. Edible told Franchise Times that these offers were winning for revenue and necessary to transform the brand; franchisees complained about the complexity they added to stores.
Burgerim franchisee Joey McCullough, for another example, said that when the brand started, “they had a simple menu that was sustainable, one, two or three little burgers,” then they added over a dozen proteins. and endless toppings. “One of the things that hurts the brand is execution, because when you get all of these one-off items you end up with a 20 to 30 minute wait.” Burgerim has bigger problems, of course, with its collapsing franchise system, but menu creep was an early element that upset franchisees.
On the other hand, franchisors who have reduced their space requirements, edited their menus, added steering-wheel-only models, etc. scored points with franchisees, with Guthrie’s Chicken-Fingers-Only restaurant being one example. “We’re able to move these drive-thru services so quickly,” said Randy Washburn, franchisee of two Guthrie stores in Memphis. “This is one of the reasons we have been so successful.”
Following: How to anger (or not) franchisees in the event of a pandemic – Part 2. Hide in your office; Focus on sales, not profits.