An Opportunity For Franchisors To Be Heroes: 8 Steps To Help Franchisees Survive Recession.

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This economic recession is an opportunity for franchisors to become heroes in the eyes of their franchisees!

This is a rare opportunity for franchisors

You have an opportunity to make decisions that will keep your franchisees in business and help them get through this economic downturn. You’ve never had an opportunity quite like this one. Deliver and you’ll be a hero!

The decisions you must make and implement won’t be easy, but they may be the only chance you and your franchisees have to preserve your franchise network.

8 ideas to implement now

Ready to get started? Not all of these ideas will work for every franchise system, but here are 8 ideas to consider now:

Defer royalties. That’s defer, not forgive. Get a lien to secure the royalties that will be owed once the economy rebounds.
Focus on your core business. What attracts new customers and keeps existing customers? Do more of that! Many businesses are simply off track right now. Should you introduce new concepts? Yes, if they make sense now. But if they come at a cost, you’ve got to ask if the franchisees can afford them. Otherwise, stick with your core business.
Get creative with advertising credits. If franchisees are supposed to spend X per month on advertising, encourage them to do more “guerrilla marketing.” For example, if a franchisee pays an employee to wear a mascot outfit and stand out on the curb and wave in customers, give the franchisee advertising credit, and be liberal. Depending on the industry and circumstances, it’s almost always a mistake to reduce advertising — too late for some franchisors.
Renegotiate supply contracts. It won’t come as a surprise to your vendors that times are tough and franchisees need some help. Those who think long-term will be willing to rework their numbers now to keep your business when the economy improves.
Renegotiate leases. You may not be in a position to step in directly, but you can help franchisees renegotiate with landlords. Many landlords are working with tenants to provide relief; they are not forgiving rents, but they are adding money to the back end of leases. Chances are, your franchisees don’t know how to begin that negotiation. Help them! Look at other leases, too.
Provide economic coaching. Insist on getting the franchisee’s financials and walk through the numbers with the franchisee. This exercise alone is likely to produce several areas of potential improvement. Show franchisees where to cut and conserve, where to outsource, and how to do more with less for the time being.
Work with the banks. Now more than ever your franchisees need you to help them make a good case in front of their bankers. Step up and create presentations that will help wow bankers and other investors. Lenders need to know the franchisor is committed to the business and to the franchisees.
Stay calm. If you get emotional, the franchisee will get emotional, too. Even if the franchisee is already emotional, you’ve got to remain calm and set the example for the franchisee. One of your jobs is to lead. Your job is not to react.

Don’t worry if some reject your ideas

Chances are the franchisees will not like any of your suggestions. Some will get emotional and some will even threaten lawsuits. Keep in mind: It’s just the frustration of the times.

Your success with your franchisees depends largely on your history and relationship with them — if they don’t trust you, they’re not going to listen. Your success also depends on your ability to communicate and persuade. (Don’t be shy about asking for help).

Imagine you as the hero!

Some franchisees — maybe many — will respond to your direction and when they’re still in business a dozen months from now, you’ll be their hero.

If you expect them to say so, you’re either smoking something or you haven’t been a franchisor for very long!

You’re not a franchisor to make friends

But what do you care? You’re not a franchisor to make friends, you’re a franchisor to build a satisfying and profitable business. You’re a franchisor to help others get what they want so that you can get what you want. Along the way, some of the franchisees will, in fact, thank you and pronounce you as their hero. When that happens, it’s all the more satisfying.

But don’t even think about the accolades now — your franchisees need your help. Get to work!

Franchisees: You’ve got opportunities, too. Work with your franchisor — better than ever before. But if your franchisor isn’t responding to your needs, speak up! Force the issue. If the franchisor still won’t listen, don’t give up. Seek the guidance of successful franchisees and any number of outstanding franchise coaches who can help you.

Register now for free tele-seminar

. . . Know someone who’s buying a franchise? Encourage them to register for my free franchise tele-seminar: How To Buy A “Hot” Franchise And Not Get Burned! Set for May 6 — space is first come, first served. Participants get a boat-load of valuable take-aways!