Franchise businesses have proven to be lucrative for a lot of entrepreneurs and seasoned business owners. In 2019, more than 773,000 franchise businesses contributed at least $787 billion to the economy. McDonald’s and 7-11, two of the most profitable US-based franchises, earned $182 billion in sales combined. The industry also benefited about 8.43 million people who worked for franchise enterprises.
The 2019 coronavirus pandemic, however, changed the way we do things, including how franchise businesses are run. With the limited movement of people, franchise businesses that rely on physical stores and foot traffic find their revenue opportunities stumped. At the end of 2019, around 30 percent of people who were planning to start a franchise business said they preferred a fast-food franchise. But how will a fast-food franchise—or any brick-and-mortar franchise business, for that matter—survive the post-pandemic business environment?
Take Your Franchise Business Online
If you’ve taken a low-interest loan to finance your franchise business, you can’t just sit around to wait for a vaccine. You need to earn now and pay your credit. Franchisors are bringing their networks online and teaching their franchisees to manage an e-commerce site. It would be good to have this discussion with your franchisor to learn how you can profit from your investment.
There are four basic business models that franchises can use, depending on the nature of their product or service. For fast food or local retail franchises, a mix of shared and distributed e-commerce models may be the best option. These business models allow franchisees to participate in the global and local marketing efforts, and make transactional site management flexible, depending on their franchisor-franchisee agreements. These models are also ideal in a post-pandemic setup because franchisees may take control of the pace and progress of their business; the more aggressive you are, the higher you drive your sales targets.
Learn the Basics of Online Businesses from the Experts
If you’re planning to put up a franchise business, consider the following:
- What type of franchise business do you want? — There are currently 3,000 businesses in the US that sell franchises; you won’t lack options. Choose based on your passion, experience, and expertise, so your learning curve will not be that high. But you can always pursue a business you’ve been interested in for a long time. Just make sure to obtain professional help with getting it off the ground.
- Make sure your franchisor offers an online system — Not all franchise businesses had a working online system before the pandemic and shelter-at-home regulations. Some of them may still be working on it because they realised that this is the new normal. Pick a franchise business with a transactional website or online store and a reliable delivery system in place. If the company has the tools, the tech transfer to you will be easier and faster.
- Get valuable advice from a franchise consultant — There are franchise businesses that provide an in-house consultant for franchisees. You’re lucky if your franchisor does. Otherwise, get one for you or talk to people who have been running franchises for years. You may go to forums or social media groups where franchise business owners congregate. The International Franchise Association, for instance, is a global organisation that supports and protects franchise business owners, and advocates for the future of franchising. It offers a lot of resources you can browse to gain insight into the industry. The International Franchise Professionals Group (IFPG) helps individuals transition to being franchise consultants. You may find possible resources and advisers on their site as well.
Being a franchise business owner will help you build your finances and capability during the pandemic. Since everything is done mostly online these days, though, it would be good to bring your franchise online, where your potential customers are. Apart from what you know about your business, get advice from professional franchise business owners and consultants; their experience will help you avoid the potholes of managing your company.