How franchisors coped with the lockdown caused by COVID-19 – with peer collaboration even sparking new methods of working together.
Not to put too fine a point on it, but before the world found itself in a state of lockdown, the franchising industry in the U.K. was fragmented and passionately partisan down ‘association lines’. There was collaboration, but it was sporadic, and certainly not part of the culture of the industry as a whole.
This was despite the best efforts of industry bodies like the British Franchise Association (bfa) and organizations like Encouraging Women Into Franchising (EWIF) Coconut Creatives, and D&T, which all did a sterling job of bringing together a whole raft of new and exciting franchises through industry events like conferences, training sessions, regional meetings and, of course, the highlight of the year, Franchise Fest. These events were fantastic and did lead to some great friendships but rarely did they lead to meaningful collaboration – the industry was just too protective of its ‘secret sauce’ for that. In an almost serendipitous way, it took a global calamity to unify the industry.
One of the key problems was that the U.K. franchising industry was passionately split down ‘party political’ lines with the longstanding dominance of the bfa being challenged by new associations like the Approved Franchise Association (AFA) and Quality Franchise Association (QFA). The AFA positioned and priced itself as the “alternative to the bfa” and attracted a large number of franchise networks that felt disenfranchised for various reasons. This fragmentation continued even further with the emergence of the QFA, which again attracted a significant number of members in a relatively short period of time.
“The type of support and collaboration needed within the franchise industry must be fluid and have the ability to evolve quickly to counteract a changeable trading environment”
The consequence was that the breakdown of franchise networks represented by the three associations was about 55 per cent to the bfa, 30 per cent to the AFA and 13 per cent to the QFA. Interestingly, this did not represent the total addressable market which a few industry veterans estimate to be at least three times larger than official figures. In fact, The Children’s Activities Association alone estimates that it has nigh-on 500 children’s franchises within their ranks, very few of which are represented by the franchise associations.
Be that as it may, everyone was quite happily getting on with it and were doing a great job of franchising their businesses and looking after their franchisees, but then COVID-19 hit the world and everything changed in a matter of 24 hours.
Smashing glass walls
To say it was panic stations for franchisors is the understatement of the century. Everyone was shocked and nobody had much of a clue what to do. However, one thing was absolutely evident: franchisors were willing to do anything to protect their franchisees from the effects of the lockdown. And within a matter of a few weeks, all-glass walls between competitors and sectors were knocked down an era of active collaboration in the franchising sector started taking effect.
In a strange twist of fate and with uncanny timing, the Franchise Mastermind Group had been launched two weeks before Britain came to a grinding halt. When lockdown was announced the Mastermind group sprung into action with no plan but with a passionate and determined mission: support franchisors in any and every way possible. There was no hidden agenda or commercial angle, which meant it quickly became a safe and neutral space which franchisors from every sector started flocking to.
The unifying call within the group was clear: “work together to find solutions or risk the failure of your network”. The call worked and the franchisors rolled up their sleeves and started an unprecedented wave of collaboration that the industry had never seen before.
Where the Mastermind group was taking an adapt and support approach to helping the industry, the bfa stepped up and took a more organized and pragmatic approach to the situation by sending out surveys to members asking how they could provide specific help. This was much needed and led to the launch of a series of surgeries and interviews which did an incredible job of accurately addressing specific needs within the franchising community. Consultancy Platinum Wave also launched regular Tuesday webinars which were well received and again, addressed a need that complemented the work the Mastermind and bfa were doing.
The collaboration between these three organizations rubbed off on the franchise community and franchisors were actively and freely starting to share best practices and even started creating PR and advertising videos together. And it did not stop there.
Collaboration is crucial
International organizations like IFPG in the U.S.A. stepped up to the plate to help U.K. franchisors benefit from the lessons learned by franchisors from across the pond. They helped arrange interviews with some incredible franchisors in the U.S. who provided us with invaluable foresight as to what the U.K. could expect in the coming weeks.
Over the course of lockdown the industry came to accept that, for the foreseeable future, the only certainty is change. Many leading business experts agree that lockdown was the easy bit and so the type of support and collaboration needed within the franchise industry must be fluid and have the ability to evolve quickly to counteract a changeable trading environment.
Already we are seeing the evolution of collaboration taking place. Franchisors are actively speaking about encouraging each other’s franchisees to collaborate in areas where they share territories. There is serious talk about centralizing back office functions in order to keep the costs low. Franchisors are working together to develop combined marketing and sales strategies in order to get more bang for their buck. We have even seen franchise networks looking to merge in order to take advantage of the economies of scale. Going forward, I think that this is going to become more and more prevalent and lead to the rise of super groups.
This new spirit of collaboration has also allowed the franchise sector to have honest discussions about shedding the unhelpful restraints of the past. This has led to one of the most exciting developments in the industry, which is the launch of a new ‘entry-level’ membership of the bfa.
To its credit, the bfa has put in a lot of hard work to reach out to franchisors that traditionally fell outside of its remit. The association has been incredibly open and helpful to all and sundry and it has been wonderful to see. As my friend Red Boswell from IFPG always says in any of his social media posts, #FranchisingStronger Together. Never before has it been more relevant or important to understand that concept.
Sean Goldsmith is a special advisor to the franchising industry.