The advent of COVID-19 sent shockwaves through economies that left no industry unscathed. But it’s crucial to remember that when there is a crisis, there are also opportunities – and the franchise industry is implementing many lessons gained from the pandemic to chart a prosperous future.
Like many other businesses, franchising suffered its fair share of losses. However, its collective strength and innovation have seen it claw its way back with greater speed than most industries.
So, rather than only focusing on the turmoil left in the wake of the pandemic and hard lockdowns, here are some hard lessons learnt from the pandemic that enduring franchises are applying to survive future disruptions and challenges:
1. Increasing focus on value
One of the golden rules of running a successful business is to understand what your customers value in order to gain a competitive advantage. As Covid demonstrated, it’s crucial to revisit this simple principle in tough times and consider ways in which your business can adapt to meet changing consumer needs.
Beyond the acceleration of digital migration, whether through an App or simply having a stronger online presence, this means that many businesses and franchises have had to adapt their offerings
Rather than just providing a service, companies are increasingly partaking in value-driven offerings. And the brands that will survive the next upset will offer more than just products or services, and instead sell convenience, compassion and experiences – particularly the feel-good type.
During the pandemic, many food brands and restaurant franchises thus gave back to impoverished communities, donating surplus stock to those in need and providing dignity to customers rather than sitting on excess inventory.
Likewise, many hotel chains internationally began offering food and beverage home delivery services – an offering that in many cases has generated consistent and growing revenue even where lockdowns have been lifted.
2. Embracing competition
In general, the business environment is a competitive ecosystem by design. But rather than viewing competition as a threat, business owners need to embrace it.
Competition is important because it enables businesses to differentiate themselves from other companies in the market, offering unique appeal to customers through individualised, specific brand traits.
One famous case is the meteoric rise of Vans footwear through appealing to the rising subcultures of skateboarding and bicycle motorcross (BMX) enthusiasts.
Locally, The Franchise Co. is home to a number of favourite South African food franchises that appeal to a diverse range of local taste preferences, including Blacksteer, ChesaNyama, Yummy Fish and Chips, Mike’s Kitchen, Nyamalicious, Yami Rib & Burger, Yami Pizza, and Zebro’s.
In addition to gaining market share through appealing to different tastes and moods, these franchises were also able to benefit from access to a wider business view and seeing how others have tackled problems and found solutions – another important lesson for businesses of the future.
3. Evolving to meet market demands
Organisations need to evolve to meet the demands of the market. This means keeping up with trends in the industry, staying abreast of cutting-edge innovations by researching widely, and remaining agile to change.
Notably, the pandemic worked to accelerate many trends taking place within the fast-food and restaurant industry and forced businesses to re-strategise and amend how they operate and interact with their consumers. However, this created a golden opportunity for businesspeople to reassess business models, and allowed franchisees to benefit from having a network of expertise to tap into in adapting to changes.
For instance, many restaurants have been forced to more carefully consider their off-premise food offering and their ability to offer outdoor dining, their digital maturity in terms of online ordering systems and loyalty programmes, as well as their value offering.
Ultimately, franchises are one of the safest forms of businesses to invest in, with immediate support in place from franchisors to meet new challenges. But as the pandemic demonstrated, business owners also need to recognise the importance of being open to change and being able to pivot quickly in times of turmoil. To paraphrase H. G. Wells, it’s adapt or die – a lesson it is encouraging to see many franchises implement.