According to Yelp, almost 100,000 businesses that temporarily closed because of COVID-19 have made the closure permanent. Many companies that stayed open still face financial hardships and an uncertain future. As a franchisee, you may have spent sleeping nights wondering if your franchise would survive COVID-19. A recent article in Entrepreneur magazine offered tips for making survival a little more certain.
Check for Sources of Financial Relief.
Government-backed loans and grants have offered obvious relief. However, there may be other ways to lessen your burden, including:
- Try to reduce any monthly payments.
- Review your budget for any unnecessary costs.
- Talk to your insurance company about reducing your premiums, especially if your facilities are closed.
At least some of the parties you approach about fee reductions are in the same boat. They may be willing to bargain as opposed to losing your business.
Think “Outside the Box.”
You may find several ways to creatively deal with COVID-19 issues, depending on the type of business you own. Your business might choose to donate overflowing inventories to local charities. You may get a tax write-off and a reputation boost.
Could you make any changes to your business operations that either:
- Lower costs,
- Increase income, or
- Diversify or offer new services to customers.
This could be a great time to get ready to re-open if you haven’t already done so.
Talk to Your Franchisor.
Have your business lawyer review your franchise agreement. It may contain provisions on how to handle disasters and sudden economic difficulties. Then, open up a discussion with your franchisor.
- Potential solutions might include:
- Reducing the monthly fees you pay to your franchisor.
- Adapting the business to new ways of delivering products and services to customers.
You and your franchisor have a mutually-dependent relationship in some respects. You both want to stay in business, and you might both benefit from a little negotiation.
Reviewing Your Franchise Agreement May Help Your Franchise Survive COVID-19.
The legal documents between a franchisee and franchisor can provide the guidance you need. Discuss your franchise agreement and ways to survive COVID-19 with your business lawyer or corporate counsel.
Attorney Richard Sierra at the Florida Small Business Center assists clients like you with business and litigation matters. As always, Our Goal Is to Help You Succeed™. For an appointment, you may call us at 1-866-842-5202 or use the contact form on our website. We represent clients throughout the State of Florida, including Coral Springs, Coconut Creek, Boca Raton, Delray Beach, Pompano Beach, Sunrise, Fort Lauderdale, Miami, West Palm Beach, Jupiter, Deerfield Beach, Stuart, Port St. Lucie, Orlando, Naples, Fort Myers, Sarasota, Tampa, and surrounding communities.