Industry Insight

Switching Gears: Franchises Pivoting During The Economic Downturn

During the Covid-19 pandemic crisis we are currently experiencing, many companies are unable to continue business as usual. Some have no possible alternative sources of revenue and will likely lay off employees, default on rent and debts, and ultimately shutter. Others have been able to adapt to the climate. For example, restaurants that relied primarily on dine-in customers are now trying to figure out how to increase the revenue from delivery via new marketing and sales strategies.

During the Covid-19 pandemic crisis we are currently experiencing, many companies are unable to continue business as usual. Some have no possible alternative sources of revenue and will likely lay off employees, default on rent and debts, and ultimately shutter. Others have been able to adapt to the climate. For example, restaurants that relied primarily on dine-in customers are now trying to figure out how to increase the revenue from delivery via new marketing and sales strategies.

Another option for businesses is to pivot entirely and offer up a new product or service that was not previously available to its customers.

Franchises are particularly motivated to adapt and pivot as they are essentially a collective of small, locally-owned businesses operating under a unified brand and system. What affects one location can easily affect another on the other side of the country, sometimes negatively, but oftentimes in a positive way. This is one of the benefits of a franchise system: one good idea can scale across the system to benefit all franchise owners. In essence, you don’t have to figure it out on your own.

Franchisors across the country are working tirelessly to come up with solutions for their franchise owners. A little known secret about franchising is that most franchisors genuinely care about the individuals and families that own one or more of their franchises. It’s easy to look at huge franchise brands like Burger King or Planet Fitness as chain corporations that are motivated by corporate greed. But I’d be willing to bet that the corporate staff cares equally about the livelihoods of their franchisees as they do about their own bottom line. The two are intertwined and unbreakable. If the individual franchisees fail, the brand as a whole fails. And vice-versa.

So in this time, franchisors must innovate, adapt, and maybe even pivot. They must put their franchisees first. Here’s a few stories where franchisors are doing exactly that:

Legion Transformation Centers
Adapted from a strictly in-person group fitness program to an online program.

From Founder and CEO, Robert Thompson (via LinkedIn):

“In about 48 hours, we took our entire company, which is based off of in person large group training and semi-private training, and put it online overnight. In 48 hours, we had the Legion at-home online portal set up. It wasn’t perfect, but it was something, and it was done fast.”

XD Coffee (Xpresso Delight)
Pivoted from providing gourmet espresso machines in offices to shipping cold brew to workers’ homes.

From CEO, Nigell Lee (via Yahoo Finance):

“We wanted to figure out a way to get cold brew shipped out directly to our loyal clients’ employees without sacrificing quality. Luckily, we had been piloting a program to ship cold brew direct to offices so while there were some logistics to work out, we already had a product ready to go that we stand by.”

Housemaster
Adapting by eliminating face-to-face interactions during home inspections.

From President and CEO, Kathleen Kuhn (via Yahoo Finance):

“Prior to the pandemic, we would encourage buyers to participate in the home inspection process to help them better understand the condition of the home. Today, for the most part we are going solo. If the home is not vacant, we ask home sellers to stay secluded in a part of the home away from the inspector. Our inspectors are taking careful to follow all CDC and Health Canada recommendations.”

Success stories like these remind us of why we’re so fortunate to be a part of this robust and resilient franchising community.

Even during these difficult economic circumstances, many franchises are pivoting, adapting and innovating with speed and grace.

We hope their entrepreneurial scrappiness encourages your small businesses to do the same. May you commit to keeping the economy, and your own personal way of life, moving forward as much as possible.