We all know that COVID-19 is having a significant impact on the economy and that the franchise industry is no exception. But does it mean that you should put your franchise development on hold and wait it out? Or should you power through with your current franchise development methods in hopes that everything returns to normal soon?

The COVID-19 pandemic is changing the way franchises are sold. These are not likely to be short-term changes, either. If you want your franchise model to survive, you will need to be proactive and forward-thinking in your approach.

The Response to COVID-19

The way we approach franchise development will have to be strategic. But, there is still plenty of opportunity for franchise growth if done right. In order for your franchise to survive, you will have to pay close attention to changes in the industry. Continue to adapt your processes and strategies accordingly. 

Here, we’ve listed five major changes that the franchise world is experiencing as a result of the pandemic.

1. Franchise Lead Generation

With many businesses closing (temporary or permanently) and more people at home, internet traffic has increased by 30%. The franchise industry has seen a 28% increase in online paid ad impressions. 

Brands that have kept up a strong paid digital marketing strategy have also seen a boost in organic leads. Organic leads, however, have decreased for those brands that have halted or decreased digital marketing spend. Paid ads help increase awareness, and often consumers will return organically later if it piques their interest.

While there was an initial drop of franchising inquiries in March, interest has seemed to pick up again quite quickly. The overall outlook among potential franchisees is optimistic, particularly in industries that are expected to bounce back from the COVID-19 crisis. 


2. Budgeting

It will be important to monitor changes in cost per lead and cost per quality lead as a result of the COVID-19 pandemic. These numbers may change depending on your industry and your marketing approach.

Keep a close eye on marketing performance in order to make any necessary budget allocation changes. Channels that produced results pre-COVID-19 may no longer be the best option. Track the performance of paid search ads, paid social media ads, and franchise portals, and reassess where your marketing dollars are best spent.

3. Expectations

You may begin to see many online visitors who are exploring franchising for the first time. According to the New York Times, 26 million people have filed for unemployment since the beginning of the COVID-19 crisis, following a period of record low unemployment. 

Business ownership might now be on the radar for people who were happily employed just a few months ago. As such, many franchisors may see an increase in the average time to close.  Voluntary or involuntary delays may also increase the average closing period.  

Even if lead generation remains strong, you will need to carefully consider adjusting your performance goals and KPIs. More flexibility may be required for time to open and to accommodate for possible supply chain interruptions. As things change, the franchise disclosure document and any sales collateral should be kept as up to date as possible.

4. Customer Experience

The first and foremost thing to consider when it comes to your customers is to be sensitive to their concerns. Many people have experienced personal hardships that may lead them to be more cautious about pursuing new opportunities. The best thing you can do to gain their confidence is to highlight how you are supporting your franchisees during this time. 

Franchise buyers want to know that you have the right systems in place to maintain business continuity. They want to be confident that the business model will continue to thrive in economic downturns. Some franchisors have also decided to temporarily offer discounted franchise fees or other incentives.

Under current social distancing guidelines, all candidate communication, including Discovery Day, will need to be converted to a virtual experience. While you may not be able to host an in-person Discovery Day, it’s vital that the customer experience does not suffer. All communications with candidates should be held to the same standards as before the virus, if not higher. It might be a good idea to secret shop your sales team to identify weaknesses in the franchise development process. 

5. Industry Trends

There are some industries in the United States that will inevitably suffer more than others as we recover from this crisis. Trends in franchise inquiries reflect where the public has put its faith in terms of business sustainability. 

The chart below is from a Franchise Insights analysis: Coronavirus Drives More Interest in Some Franchise Categories, Less in Others.

From Franchise Insights

Staffing and personnel, real estate, education, and cleaning and maintenance have experienced the largest upticks in franchise inquiries. There will still be a strong need in our communities for personal services, child care, and food service as our economy recovers, in spite of a decrease in public interest for these franchise opportunities. 

Some Final Words of Advice

Be sure to carefully examine what your franchisees and customers need. Every industry and every franchise may require a slightly different approach. Assess the effectiveness of efforts and readjust as needed. Always keep your long term goals for the franchise system in mind as you continue to improve your business strategy.

Communication with franchisees and listening to their concerns will be key to the success of your brand. Stay up to date with economic and industry changes and stay ahead of the curve whenever possible.

“The risk here is that this pressure could lead to exacerbating the same mistakes that have plagued many franchisors for years: choosing the wrong franchisees, sites, and territories to achieve short-term objectives. Don’t let that happen. Take the time to assess your business and build a plan for long-term success.”


At Franchise Accelerators, we continue to generate leads and accelerate growth for our franchise partners while being cognizant of the COVID-19 impact. We work closely with our brands to ensure alignment of goals and the continued success of the franchise system. 

Don’t get left behind—contact us today to learn more about our franchise development strategies that will keep your acceleration on track. 


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Franchise Development: Now Is the Time To Prepare a Post–Covid-19 Plan

Coronavirus Drives More Interest in Some Franchise Categories Less in Others

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