Post 2020, you are likely looking for a franchise that can adapt during a crisis such as a pandemic.
In this developing post-pandemic world, there are a lot of things being done differently. We’ve seen many businesses pivot and adapt to unprecedented change, tackling new challenges head on and coming up with innovative solutions to look after their staff and franchise partner and continue providing value to customers. We’ve seen growth in certain industries, and watched new franchises enter the market and flourish!
So, what should you look out for when purchasing a franchise after COVID?
As always, we recommend doing your due diligence and carrying out extensive research before making a significant financial and personal commitment such as buying a business. Having an understanding of the franchise structure, support offered by the franchisor and initiatives for success will give you an idea of how hands-on the franchisor will be and some of the expectations on franchise owners.
Another element to consider is the size of the franchise network. Will the business you buy be a part of a large or small network? A small network of franchisees may allow for quick decisions and adaptability by the franchisor. However, large franchises systems may have better bargaining power when it comes to negotiating leases and reducing costs in the supply chain.
During the pandemic we saw many franchise systems adapt the way they do business such as increasing online delivery as well as helping their franchise partners adapt to COVID safe practices. We saw many franchisors negotiate the reduction in lease payments during lockdowns. Having access to this kind of support and information during a period of crisis cannot be underestimated. So don’t be afraid to ask questions about how the franchisor supported franchise partners over the past 12 months.
Other things to consider include:
- Transparency – can you speak with the franchisor and ask questions directly? Are your questions answered thoroughly? How about chatting with current franchisees?
- Communication – does the franchisor communicate timely messages? Are they available to answer questions and provide guidance?
- Adaptability – what changes took place during the pandemic? Did businesses close or did they introduce new ways of doing things to continue operation where possible?
It really pays to investigate how the franchise supported franchisees during a period of uncertainty and change.
Although this new “normal” will continue to be laced with change, partnering with a larger business in the way of a franchise may help to mitigate some of the risk of venturing into business ownership. A common reason for choosing to purchase a franchise is the support of an experienced network and pooled resources. But as always, do your homework to make sure whatever business you are investigating, it will deliver on your expectations.