Support from the franchisor, collective intelligence and an entrepreneurial spirit: franchisees possess highly effective weapons to resist the crisis. An advantage confirmed by many of them, who quickly adapted to the new situation imposed by Covid 19.
According to the 17th annual Banque Populaire franchisesurvey , carried out in partnership with the French Franchise Federation and Kantar, 67% of franchisees feel they have weathered the crisis better than their counterparts on their own. This trend is confirmed by data from the French Franchise Federation, which shows an average loss of sales of just 5.8% across all networks. This decline is far from catastrophic in view of the economic situation in 2020, and is significantly lower than that recorded by individual entrepreneurs or branch networks (-10% in sales for the latter). In the face of the Covid 19 crisis, franchising seems to be a model of resilience. To what does she owe this advantage? The answer lies in its very essence: the strength of the network and the collective.
The franchisor, a captain at the helm
As we all know, “the fish always rots from the head”. But the opposite is also true: it’s because there’s a captain at the helm that the ship doesn’t sink in the storm. The franchisor’s support is often the first reason given by franchisees to explain their resistance to the crisis. Here again, the figures don’t lie: 93% of franchisees say they were supported by their franchisor throughout the crisis. This support, while necessary, is not simply a matter of kindness, since it is contractually owed by the network head to its franchisees, in exchange for a fee.
In response to Covid, franchisors have redoubled their efforts to communicate effectively with their networks. More regular and supported by digital tools, this communication has enabled franchisors to reassure, support and train their franchisees in new processes designed to keep their outlets in business. 91% of franchisees confirm that they have received at least one visit from a network coordinator. Thanks to the franchisor’s support, they were able to quickly develop new services to meet their customers’ needs. Some franchisors have also provided financial or psychological support to franchisees in sectors hardest hit by the crisis.
The franchise network: all for one, one for all
Although entrepreneurs are particularly fond of their independence, it can quickly turn into an immense loneliness in the face of adversity. This is where the franchise model proves particularly advantageous. As both independent entrepreneurs and members of a network, franchisees don’t have to face difficulties alone. “The strength of franchising is that it’s global. Franchisees can call each other to find out how they’re doing and what they’re doing. There’s a reassuring sharing of information, with people who can compare themselves on the same job,” confides one franchisor.
In the midst of the turmoil, the franchisees were able to count on their fellow sufferers for support and good advice. The 17th Annual Franchise Survey confirms that 42% of franchisees have attended more frequent network meetings and have increased the number of exchanges between them. This figure soars in the sectors hardest hit by the crisis, such as cafés, hotels and restaurants (68%). This advantage is not available to the sole trader, whose responsibility it is to reassure his employees, but who has no one to reassure him.
Entrepreneurial spirit: the little extra that makes all the difference
With the support of their peers and the backing of their franchisor, franchisees have weathered the crisis better than their counterparts on their own. Better still, they proved more resilient than branch networks. Franchise sales fell by 10%, while franchise sales fell by only 5.8%. One might imagine, however, that branch members enjoyed the same support from their parent company as from their colleagues assigned to different sales outlets.
It’s undoubtedly this entrepreneurial spirit that has made the difference between franchisees and salaried branch managers. As entrepreneurs above all, franchisees have that little something extra that enables them to be more proactive and creative in maintaining links with their customers, and in setting up alternative distribution channels. In fact, 86% have implemented specific actions to adapt to the new situation imposed by Covid. The vast majority of franchisees were able to adapt to the crisis by working in concert with the network head, and because they had a mutual interest in surviving. Some even came out on top.
