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A checklist to guide franchisors through COVID-19

15 April 2020
racha abboud
Read Time 4 mins reading time

We are living in unprecedented times with a rapidly changing business landscape. Franchises, like all other businesses across Australia, are rapidly adjusting to weather the impact of COVID-19. This checklist contains some areas to consider moving forward.

do you know your franchise’s obligations to minimise the spread of COVID-19?

Businesses have a legal obligation by both the Federal and State/Territory Governments to adhere to measures in place with penalties for individuals and businesses who fail to do so. These vary in each State so don’t assume that you’ll be operating in the same way in each State or Territory. Resources to assist you with the latest developments include the Federal and State/Territory Government websites, and Departments of Health.

✓ are you still meeting your obligations under the franchising code of conduct?

As a franchisor, your legal (and ethical!) obligations under the Code still apply.

✓ are you being transparent with franchisees?

Everyone is impacted by the COVID-19 pandemic and businesses need to adapt rapidly to cater for changing economic conditions, as well as restrictions and legislative changes introduced to flatten the curve. Talk to your franchisees and communicate the challenges. Make sure the communication is two-way – they may present you with some great ideas about maintaining a viable business.

Make sure you have plans in place to communicate updates with your franchisees, employees and other key stakeholders.

✓ have your reviewed and updated your business continuity plan?

This is a critical step in ensuring that your business has the tools and resourcing in place to continue operating during and post COVID-19. View a guide to assessing your business continuity plan around COVID-19.

✓ have you assessed your finances?

Many businesses have been required to close their doors to slow the spread of COVID-19. Others are operating in a limited capacity or are experiencing difficulties in providing goods and services to consumer who are also being impacted financially and told to stay home. There may be a reduction in cashflow but outgoings remain.

Take an in-depth look at your outgoings and work out areas where you may be able to cut costs or apply for assistance. Pay careful attention to the financial situation of each of your franchisees and work with them to implement measures where required. You will need to tailor your approach depending on where and how you operate and the individual financial situation of each franchisee.

✓ can you pay your outgoings?

It is important when assessing this question that you also consider how long you can pay your outgoings. Measures currently in place are for a minimum of six-months and very few businesses can afford to operate for that length of time with minimal to no cashflow.

There is some financial assistance available at both a Federal and State level so avail yourself of this information. The information below refers specifically to Federal assistance you may be able to access:

Area where support is required Support available (where eligible)
Employees
    • $130 billion JobKeeper payment. Enables employers to provide fortnightly payments of $1,500 (before tax) to employees. Learn more.
    • 50 cent wage subsidy of apprentice/trainee wages until 30 September 2020. Learn more.
    • Early Childhood Education and Care Relief Package for child care operators. Learn more.
Rent
    • A moratorium on evictions over the next six months for commercial and residential tenancies in financial distress. Learn more.
Mortgage
    • Six-month deferral on your mortgage. Learn more.
Business loans
    • Six-month deferral of your business loan. Learn more.
✓ can you change your business model?

Innovate, innovate, innovate! There is a great expression that “necessity is the mother of invention” so what can you do differently to adapt to the current circumstances so that your franchise can survive?

Franchises in the fast food and restaurant sector are offering takeaway and meal delivery with a side order of contactless payment, gyms and personal trainers are going virtual and others are opting to offer completely different services altogether to cater for changing consumer needs. If you are looking at changing your franchise’s business model, there are some points to consider.

✓ is your supply chain equipped to see you through COVID-19?

Whilst freight and logistics are regarded as an essential service, that’s not to say that COVID-19 won’t impact your supply chain – if it hasn’t already. Disruptions to your supply chain can include issues difficulties obtaining raw materials, cashflow problems and more. You can learn how to alleviate supply chain pain here.

✓ are you communicating with your customers?

People understand the difficulties businesses face at the moment and are keen to try to support their favourite businesses. Make sure you keep them in the loop with how your franchise is adapting to COVID-19 including closures, reduced operating hours or new online delivery of services.

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A checklist to guide franchisors through COVID-19

15 April 2020
racha abboud

We are living in unprecedented times with a rapidly changing business landscape. Franchises, like all other businesses across Australia, are rapidly adjusting to weather the impact of COVID-19. This checklist contains some areas to consider moving forward.

do you know your franchise’s obligations to minimise the spread of COVID-19?

Businesses have a legal obligation by both the Federal and State/Territory Governments to adhere to measures in place with penalties for individuals and businesses who fail to do so. These vary in each State so don’t assume that you’ll be operating in the same way in each State or Territory. Resources to assist you with the latest developments include the Federal and State/Territory Government websites, and Departments of Health.

✓ are you still meeting your obligations under the franchising code of conduct?

As a franchisor, your legal (and ethical!) obligations under the Code still apply.

✓ are you being transparent with franchisees?

Everyone is impacted by the COVID-19 pandemic and businesses need to adapt rapidly to cater for changing economic conditions, as well as restrictions and legislative changes introduced to flatten the curve. Talk to your franchisees and communicate the challenges. Make sure the communication is two-way – they may present you with some great ideas about maintaining a viable business.

Make sure you have plans in place to communicate updates with your franchisees, employees and other key stakeholders.

✓ have your reviewed and updated your business continuity plan?

This is a critical step in ensuring that your business has the tools and resourcing in place to continue operating during and post COVID-19. View a guide to assessing your business continuity plan around COVID-19.

✓ have you assessed your finances?

Many businesses have been required to close their doors to slow the spread of COVID-19. Others are operating in a limited capacity or are experiencing difficulties in providing goods and services to consumer who are also being impacted financially and told to stay home. There may be a reduction in cashflow but outgoings remain.

Take an in-depth look at your outgoings and work out areas where you may be able to cut costs or apply for assistance. Pay careful attention to the financial situation of each of your franchisees and work with them to implement measures where required. You will need to tailor your approach depending on where and how you operate and the individual financial situation of each franchisee.

✓ can you pay your outgoings?

It is important when assessing this question that you also consider how long you can pay your outgoings. Measures currently in place are for a minimum of six-months and very few businesses can afford to operate for that length of time with minimal to no cashflow.

There is some financial assistance available at both a Federal and State level so avail yourself of this information. The information below refers specifically to Federal assistance you may be able to access:

Area where support is required Support available (where eligible)
Employees
    • $130 billion JobKeeper payment. Enables employers to provide fortnightly payments of $1,500 (before tax) to employees. Learn more.
    • 50 cent wage subsidy of apprentice/trainee wages until 30 September 2020. Learn more.
    • Early Childhood Education and Care Relief Package for child care operators. Learn more.
Rent
    • A moratorium on evictions over the next six months for commercial and residential tenancies in financial distress. Learn more.
Mortgage
    • Six-month deferral on your mortgage. Learn more.
Business loans
    • Six-month deferral of your business loan. Learn more.
✓ can you change your business model?

Innovate, innovate, innovate! There is a great expression that “necessity is the mother of invention” so what can you do differently to adapt to the current circumstances so that your franchise can survive?

Franchises in the fast food and restaurant sector are offering takeaway and meal delivery with a side order of contactless payment, gyms and personal trainers are going virtual and others are opting to offer completely different services altogether to cater for changing consumer needs. If you are looking at changing your franchise’s business model, there are some points to consider.

✓ is your supply chain equipped to see you through COVID-19?

Whilst freight and logistics are regarded as an essential service, that’s not to say that COVID-19 won’t impact your supply chain – if it hasn’t already. Disruptions to your supply chain can include issues difficulties obtaining raw materials, cashflow problems and more. You can learn how to alleviate supply chain pain here.

✓ are you communicating with your customers?

People understand the difficulties businesses face at the moment and are keen to try to support their favourite businesses. Make sure you keep them in the loop with how your franchise is adapting to COVID-19 including closures, reduced operating hours or new online delivery of services.