How COVID-19 Changed Franchise Development

These are unprecedented times in the franchise space. I’ve been in the franchise industry for the last 25 years and I have never experienced anything like the COVID -19 pandemic. As COVID-19 continues to alter our everyday lives, we are forced to make changes and adapt to the new circumstances. Franchise development specifically has had to go through a lot of changes in order to adapt to the ever-changing environment.

My company, Franchise Scale, has managed to keep our franchise development processes the same with the exception of remote working (i.e. no personal meetings or contact for the most part). Discovery Days for each of my brands have gone completely virtual. Many of the brands I manage are service brands, so usually for a Discovery Day, we would go out into the field with a technician from one of the brands so the prospective franchisee gets to experience what a day in the life of a franchisee is like and how our brand interacts with customers. Due to COVID -19 that is just not practical, so we have pivoted to virtual Discovery Days. We will film a field visit to a customer’s home or business to provide the prospective franchisee with an understanding of how our business works and what they can expect when interacting with customers. Our in-person “Discovery Days,” where the prospect typically visits our company headquarters and meets the corporate team, are now replicated via Zoom calls, whereby all prospective franchisees and our corporate team are live on video. I think it is very important to establish a connection between prospects and corporate during these virtual Discovery Days, and the best way to do that is to see how you engage with each other on a video call. That way, when the franchisee comes in for training, there is already a level of familiarity that can start the relationship off successfully.

In addition to adapting your discovery day process, it is also incredibly important during this time to showcase your brand’s success and resiliency during a pandemic and a recession. Prospective franchisees want to see how the business model of the brand they are interested in holds up during these rapidly changing circumstances. Prospects are also looking to learn how adaptable your model is and want to see how the leadership team is able to pivot and push forward. With my brands WaveMAX Laundry, The Flying Locksmiths, Surface Experts, and Nerds To Go (all of which have been deemed essential services by the government), our development initiatives continue to move forward. We have shown our prospects that our development and expansion plans have not slowed down due to the pandemic by constantly engaging with our pipeline and updating them about new deals being signed, new territories being available, etc. It is of paramount importance that brands continue to showcase their success throughout the pandemic. If you want to bring prospects in the door, you need to show them why they should buy into your system (i.e. Amazon-proof concept, essential service, etc.).

During this time, we also have seen increased interest for semi-passive ownership models. I manage WaveMAX Laundry – a laundromat franchise chain founded in 2012 – one of the hottest franchise concepts in the country. Prior to the pandemic, we were closing five to six deals per month, but once deemed an essential business by the government, we resonate with doctors, attorneys, and multi-unit franchisees who own other brands. The reason? People right now are looking for ways they can diversify their income, and by owning a business where you only have to manage it for four to eight hours a week, professionals are able to continue on with their regular jobs while having passive income as well. Concepts that can offer this to their prospective franchisees are going to do well moving forward, especially if they are an essential business.

Another key focus during this time is to show your differentiation from other concepts. People ask me all the time “what type of business I should buy?” I always tell them, “one that can’t get off-shored, run off by Amazon, or done on the Internet”. If you look at commercial locksmithing/security integration, check the box. If you look at small business IT support and service, check the box. If you look at hard surface repairs as a maintenance function, check the box. Again, I feel very lucky to be in these service channels that will never go away. Sexy businesses? No. Pandemic and recession-proof? Absolutely. Showcasing your concept’s utility to a prospective franchisee is paramount, and this pandemic has provided an opportunity for brands to show why franchisees should invest in your business.   

Dennis Mulgannon is a 25 year franchise industry veteran and is the founder/principal member of Franchise Scale – a franchise development firm that helps start-up franchise concepts expand their networks. In the past decade, Dennis has grown six brands to national acclaim, including Home Care Assistance, Junk King, The Flying Locksmiths, Nerds to Go, Surface Experts, and now, WaveMAX Laundry.  

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