Franchising During a Pandemic: Is it a Smart Move?
Every industry was hit hard this past year due to the global pandemic. From gyms, retail, food and beverage, and everything in-between, hard decisions had to be made. Something that a lot of these concepts share in common is that they are franchises. After the devastation the economy saw these last few months many are wondering: is franchising still a thing?
Tough Economic Times and Franchising Models - Can They Still Work Together?
The key to success in franchising is finding an industry and model that is not only prevalent now, but will continue to thrive during hard economic times. According to Franchise Business Review, franchises within the janitorial, food, child services, and car repair industries are among the top recession proof concepts. Franchisees and franchisors need to find out what the consumer wants to spend their money on when they are on a budget.
Even during a recession, there are few things that people refuse to give up regardless of external influence, and at the top of the list is coffee. Throughout the pandemic, coffee shops were lucky enough to not only stay afloat, but thrive. This is no doubt thanks to the cult following of the caffeinated beverage. Franchises that offer these goods are more likely than other concepts to continue to prosper and have proved their survivability, making them an ideal investment.
Because of the health guidelines put in place because of COVID, it added a whole new hurdle to franchising during hard economic times. Prior to coronavirus, there was never a time where businesses had to shut down their lobbies. So, it makes sense that models with drive-thru prototypes were in a better place to take on COVID than those without, and PJ’s Coffee experienced it firsthand. PJ’s Coffee has been able to make guests feel safe, while still providing their notable southern charm thanks to its newer focus on drive-thrus at their cafes. Drive-thrus enable the customer to still enjoy a cup of coffee or pastry without going inside and exposing themselves to the virus.
Essentially, this is a product consumed out of habit and behavior and if we can offer them a contactless purchasing option, the franchise model can most certainly still work, and did. Coffee is recession resistant and PJ’s Coffee proved franchising models in this industry can succeed regardless of the economic climate, as long as they are willing to put in the work.
Start at Square One – Supporting Your People
The main benefit of being a franchisee during tough economic times is having the support from the franchisor, compared to mom-and-pop shops that do not have the marketing and operational support of an experienced national brand. Specifically, the PJ’s Coffee corporate team was one step ahead and kept their franchisees in the know at all times.
At PJ’s Coffee, we consider our franchisees family. We know when their children’s birthdays are, check-in to see how that vacation was, and give a call because we care. We’re a family run business - family is at our core. So, when COVID hit, we knew operational changes had to be made to ensure our franchisees would continue to thrive.
The first step to maintaining success was providing our franchisees with proper guidance. PJ’s created a process to deal with new operational procedures, like how to maintain a six-foot distance at all times and how to properly sanitize the store to meet COVID-19 requirements. The condiment stands were completely removed, requiring all customization requests to be carried out by baristas and sanitization stations were swiftly rolled out to all locations. PJ’s Coffee also provided webinars aimed at showing franchisees the process to obtain the PPP loan. These resources are still being provided and will continue for as long as necessary. If a franchisee is supported, they can provide that same comfort to their own employees. It is crucial for everyone, from the top down, to feel like someone has your back, and that will continue long past COVID.
What Prospective Franchisees Should Look Out for When Deciding on a Franchise
Just like any other business venture, deciding to open a franchise is an investment – not only financially, but a timely one as well. So, what are things potential franchisees should seek when deciding what franchise to invest in?
It is imperative to look into the company’s past decisions and outcomes of crises, economic hardships, and any other challenges that face the brand. Additionally, it is import to talk to current franchisees and get their insight and thoughts on the franchise as a whole, because the corporate team may have great things to say, but the franchisees are walking the walk.
Not only should a prospective franchisee look at the culture of the brand, but they should also look at the specific industry’s consumer behavior. Is this concept feeding to the consumer’s long-term needs and wants? Or is the concept a trend or fad that will not have legs 10 years down the road?
At the end of the day any investment should be smart, but it should also be met with passion. If a franchisee cannot fully immerse themselves in the company and express their upmost excitement and love for the brand, it may not be a fit.
Ryan Stansbury currently serves as the Vice President of Franchise Development for PJ’s Coffee of New Orleans. Prior to being promoted to his current role in 2019, Stansbury served as the Franchise Development Director for all of Ballard Brands, LLC., for nine years. With over 15 years of franchise development experience, Stansbury’s primary responsibility is to facilitate domestic and international growth for a portfolio of retail brands. In February 2007, Mr. Stansbury received the designation of Certified Franchise Executive (CFE) by the International Franchising Association for his work and study in the franchise industry and has maintained that designation to date.