The employees (both of the franchisees and of the franchisor) of a franchise network are one of its most invaluable asset.
It is they who prepare, transport, distribute, sell and deliver the goods, and render the services, offered by the network.
They are also the primary players in the customer experience offered by the network since they are those in immediate contact with customers.
They are therefore essential to the sustainability of any franchise network.
However, the current pandemic, with its many secondary impacts (including temporary layoffs, work time cuts, telecommuting, physical distancing and, as a result, a good dose of isolation and loss of contact), is creating a sense of powerlessness and insecurity for all employees, which increases as the crisis continues.
The challenge of protecting and retaining employees obviously concerns all businesses, not just franchise networks.
What is, however, particular to franchise networks is the fact that the franchisor, who is not the employer of the employees of its franchisees, must still play an important role vis-à-vis them to maintain its network in the best possible shape and, also, to preserve uniformity between the franchised businesses and to prevent inappropriate, anarchic or discordant behaviour on the part of franchisees.
Also, without the franchisor taking on the role (and responsibilities) of an employer towards the employees of its franchisees, here are a few examples of excellent franchisor practices in the context of the health crisis we are now experiencing:
1. Rapidly designing and implementing improved protection and hygiene standards
The design and implementation of the applicable standards within a franchise network is obviously the responsibility of the franchisor.
During and after the current crisis, a franchisor must therefore design and implement throughout its network new health, hygiene, sanitation and safety standards that (i) meet the requirements and recommendations of public authorities, (ii) adequately protect its franchisees, their employees and the customers of the network, and (iii) allow franchisees to operate their businesses in the most profitable manner possible under the circumstances while properly protecting the health of their employees and of the customers of the network.
For employees, this will also involve training to familiarize them with these new standards and to ensure that they are properly complied with.
Proactive franchisor-franchisee collaboration will greatly facilitate this exercise.
2. Reviewing and updating operation procedures and manual.
It will not be enough for a franchisor to add new health, hygiene and sanitation standards to update its franchise concept at the end of this crisis.
Compliance with these new standards, as well as several important changes in consumer habits and in the business practices of suppliers, distributors, carriers, etc., will require a major review of the business processes and operating procedures of franchised businesses to enable them to maintain, or recover, their profitability as quickly as possible.
For many franchisors, this crisis will also require the implementation of new sales, delivery and service delivery methods, as well as the addition of new products and/or services.
As with the new health, hygiene and sanitation standards, the franchisor will have to provide its franchisees with the necessary tools to enable them to properly train their employees on these changes or, alternatively, provide itself such training to the employees of its franchisees.
3. Integrating telework and mobile working
In several sectors of activity, the place of telework and mobile working has increased considerably during the COVID-19 crisis.
It is likely that they will now become an inescapable reality in the world of work and business.
As a visionary, leader and manager of its network, a franchisor should therefore examine how best to take advantage of these modes of work for its entire network and make the necessary changes to its business model to enable both its franchisees and itself to achieve this goal.
This is not only a matter of promoting working from home.
Telework also includes mobile work (in or from vehicles), remote services (by telephone, e-mail or virtual meetings), virtual showrooms, online exchanges ("chat") on Internet sites or social media, remote transactions, road and at home services, etc.
4. Reviewing the job descriptions of network employees.
The addition of new health, hygiene and safety standards, as well as changes in operating procedures, will also require the revision of the job descriptions of several employee positions, notably in order to include the actions required to implement the new standards and changes in the operating policies and processes of the franchised businesses.
Revised job descriptions or even the creation of new positions will also be required for new activities and new services that will be offered by the franchised businesses as a result of changes to the business model of the franchise network.
5. Improve employee skills and abilities
The reduction in employees' working hours during this crisis presents an opportunity to offer them various training programs to improve their skills and abilities.
Government assistance programs (including, in Québec, the Programme actions concertées pour le maintien en emploi [PACME-COVID-19]) offer subsidies that can cover up to 100% of training costs and even a portion of the salary of the employees who take the training. Several other provinces offer similar programs.
The fact that a franchisor offers and encourages such training for its network employees makes it possible (i) to keep employees active, (ii) to provide them with some income, and (iii) to improve their skills and abilities, among other things, in order to better accomplish the new or additional tasks that will be assigned to them during and after the crisis.
6. Keeping employees well informed on an ongoing basis
For an employee (as for all of us), even when the future looks bleak, not knowing what to expect is much more stressful than knowing.
In the context of a crisis whose parameters are constantly changing, it is therefore very important to keep the employees of the network well informed of what is really happening and what is coming for them (insofar as the franchisor can itself know himself).
This information should cover news that affects the employees and the franchise network, the franchisor's decisions and actions, the decisions and actions of franchisees (who are their employers), the assistance programs available to them (with their frequent updates) and the franchisor's frank, honest and direct view of the prospects for the network and their jobs.
Information on government assistance programs can be found on our Coronavirus (COVID-19) Knowledge Centre.
7. Communicating quickly and frequently
As highlighted in our recent newsletters COVID-19: A Unique Opportunity for a Franchisor-Franchisees Strategic Partnership! and Beyond COVID-19: A Different World and Improved Collaboration Between Businesses and Within Networks, communication is a key determinant of how a franchise network will emerge from the current crisis.
While the focus of these bulletins is on franchisor-franchisees communication, the tips you will find in these bulletins also apply to communication with network employees.
This communication must be timely, frequent, useful and in all directions (franchisor to franchisees, franchisor to employees, franchisees to employees, franchisees to franchisor, employees to franchisees, franchisees to franchisees and employees to employees).
Such open communication allows the franchisor, as well as its franchisees, to quickly learn about issues, concerns and the state of employee morale, and to act better to keep them within the network despite time cuts and temporary layoffs.
We also invite you to reread our newsletter entitled Beyond COVID-19: Faster and More Flexible New Communication Tools within Franchise Networks in which you will find several new communication tools available for a franchise network.
8. Maintaining motivation and a sense of belonging
One of the consequences of telework, temporary layoffs, cuts in working hours, containment and social distancing is a decrease in work motivation and sense of belonging to an organization.
A franchisor who is aware of these consequences and the risks they pose in the medium and long term (including the permanent loss of good employees) should consider implementing various means to maintain a high level of motivation and sense of belonging among network employees and, why not, a high level of pride in being part of the network.
Several tools and initiatives can help achieve these goals, including online social activities (e.g., virtual happy hours and breakfasts), the delivery of small gifts, and frequent (but not too frequent) and regular exchanges (by telephone or electronic means).
With the creativity that we know of our franchisors and franchisees, there is no doubt that many will be able to design several interesting initiatives to keep their troops motivated.
9. Involving employees in community support and charitable initiatives
An excellent way to maintain the motivation and sense of belonging of franchise network employees and, at the same time, to make a difference in these difficult times for many of the most vulnerable people in our society is to involve network employees in charitable and community support initiatives.
One could think, for example, of distributing masks (possibly with the network's logo on them), of doing errands for confined, sick, handicapped or elderly people, or simply of communicating regularly (by telephone or on an electronic application) with people who are alone, sick or isolated.
There is also the delivery of meals and various other goods to health-care workers who work tirelessly with sick, to vulnerable people and to food banks in great need.
The need for help is immense and the creativity to help and contribute knows no limits.
10. Fostering mobility (temporary or permanent)
Although no one wants this to happen, we must still be realistic: despite the numerous assistance programs, many businesses, including franchisees, will not financially survive this crisis financially and will have to permanently shut down their operations, while others will have suffered a sharp drop in revenues that will force them to reduce their expenses, of which labour costs are an important component.
This will inevitably result in job losses for well-trained, competent and dedicated employees.
On the other hand, at the end of this crisis, some employees may choose, for various reasons, not to return to their previous position.
On another level, during the crisis, some franchised businesses are being closed and several others are seeing their activities reduced, while some other activities (e.g. online sales, delivery, remote advice and central kitchen production) have increased considerably and require several additional employees.
For a franchisor, this presents an opportunity to put in place within its network, obviously in close collaboration with its franchisees, mechanisms to promote the mobility (temporary or permanent) of employees who have been laid off or whose working hours have been reduced.
11. Supporting franchisees in the search for new employees
Finally, a franchisor could also prepare for post-crisis business recovery by putting in place various means and tools (including on its website) to assist its franchisees in recruiting new employees to replace those who will have chosen not to return to their previous positions when business resumes.
This short list of tips to protect, and also retain, the employees of your franchise network is obviously not exhaustive and, with a little creativity, you will certainly find several others just as, and perhaps even more, useful and relevant to your network.
We sincerely hope that your network will recover as well as possible from this crisis and, in the medium and long term, that it will become even better and stronger.
Fasken has all the expertise and resources necessary to help you better manage your franchise network, even in a crisis situation, to achieve your goals, take advantage of opportunities and avoid potential pitfalls.
We also have a team of seasoned experts in labour law and human resources.
Originally published 21 May 2020
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
