Why franchises are uniquely poised to navigate the stresses of the pandemic

Open this photo in gallery:

You would think Kristen Gale, chief executive officer and founder of beauty bar franchise The Ten Spot, would be able to get a pedicure on demand. But in the days after many of Ontario’s COVID-19 pandemic restrictions lifted this summer, she was like everybody else: trying to score an appointment.

“And I have access to the back end of the system,” she says now from her home in Toronto. “I was looking at every single bar that I could drive to within an hour and I could not get in for a whole month.”

As the face (and fingers and toes) of the company, she finally secured a spot, but even today many of the franchise locations are still booking three or four weeks out. One Montreal location’s business is up 89 per cent compared to last year, and eight new franchisees have opened shop across Canada and the U.S. since the pandemic started, even as many bars were shuttered for months due to lockdowns.

This bullishness may reflect the fact that 68 per cent of Canadian small business owners now feel confident that their business will recover in 2022, according to a recent Equifax Canada survey, although those in many industries, from restaurants to travel, still feel the pinch as they struggle with lagging customer demand, a lack of supplies and employee shortages.

David Druker, incoming chair of the Canadian Franchise Association board of directors and CEO of The UPS Store Canada, says franchises offer people a way to become small business owners in their communities while having access to a franchisor’s proven business system and support to help ride out the storm.

“Franchising is really a lot of small businesses, so it’s no different than the rest of the world. It’s all been impacted” by the pandemic, he says. “The big difference is that franchising is about being in business for yourself, but not by yourself.”

While most small businesses have had to rely on government relief programs and wage and rent subsidies at some point, Mr. Druker calls the current franchising climate, “rolling.” He says economic uncertainty often actually leads people to re-evaluate their career choices and start considering ways to become their own boss. The pandemic may have actually made it even easier for his association to entice potential franchisees. Pre-pandemic, a Toronto trade show presentation might have drawn 20 people. Today the association gets 200 people attending 45-minute Zoom webinars in the middle of the afternoon.

Open this photo in gallery:

The benefits they offer are many. Franchises help with everything from site selection to day-to-day operations – and don’t forget procurement. During the early days of the pandemic when toilet paper and hand sanitizer were in short supply, franchises were pushed to the head of the line since they were buying thousands of cases at a time, explains Mr. Druker.

But the biggest draw is community. Franchises aren’t insulated from economic hardship, but there is a network of staff who can work together to find ways to pivot. It’s a team effort.

That’s exactly what Brian Bazely, CEO of Driverseat, found. Based in Kitchener, Ont., and with franchises in Ontario, Alberta and in the U.S., the shuttle transportation firm found its main work – chauffeuring clients to airports, weddings and on craft brewery tours – grounded when the pandemic hit. At first, there was confusion and worry. Then, he got to work.

“I spent literally the next 30 days straight on the phone with franchisees just talking them off the ledge and on to what they needed to be doing in order to move ahead with this,” he says. “I had to become a wartime CEO and really push people outside their comfort zones, but still remain empathetic because this was more than just commerce. This was health.”

It also meant picking up airline passengers and driving them to where they would self-isolate or shuttling personal service workers to people’s homes. They even started driving essential workers to processing plants and other workplaces so they could avoid public transportation and get there safely.

But the most innovative idea came from one of the franchisees who started grocery shopping for families in lockdown. That good turn eventually became a program called Shop & Drop with chauffeurs shopping for 10 families at a time and loading groceries into commercial-sized vans.

“It kept the chauffeurs employed and the wheels turning on the vans, but we were also doing stuff to help flatten the curve,” says Mr. Bazely.

Kim Hamm’s franchise, Dogtopia Canada, had to pivot hard too when the pandemic hit and its canine boarding and daycare business went, well, to the dogs. When travel ended, so did about 25 per cent of the franchisees’ business. The doggy daycare side was impacted negatively too, although frontline and essential workers still continued to use it.

But when franchisees started noticing an uptick in first-time dog owners asking for training help with their new pandemic puppies, a lightbulb went off.

“Dog parks were shut down and so there wasn’t really anywhere to go for these new pet parents or these new puppies,” she says. In response, Dogtopia rolled out a new five-week puppy preschool program. Franchisees got extra coaching and support so classes would be consistent across the country.

For The Ten Spot, consistency has been a challenge, says Ms. Gale, as each province and state allows and disallows various services. (Facials are no-no’s in some areas, for instance.) But the pandemic has offered a slight silver lining: affordable real estate. It’s much easier to secure primo locations for new franchisees.

The pandemic has also pushed her to look for ways to focus on what really matters. Those thousands of dollars spent on coffee pods? Nobody is allowed to drink in the shops anyway. They can go.

“We’re just so much more resilient than I ever could have imagined,” she says.