Let’s Talk: Crisis Management For Franchisors

Understanding crisis management in franchising is an incredibly important part of a successful franchise system. 

A crisis can range from personal challenges (such as the loss of a loved one) to business emergencies (like floods or robberies) to extreme disasters (hurricanes or major scandals), and the importance of having both internal management strategies in place and support for your franchisees is paramount.

Being prepared for all kinds of crises is a form of caring for your franchisees, corporate team, and customers. Planning for emergencies and taking care of everyone involved in your brand, no matter the challenge that arises, is how you can protect them. Having a plan for the worst-case scenarios reassures everyone that you have their backs.

The Importance of Crisis Management in Franchising

As franchise development becomes more and more competitive, potential franchisees will ask more detailed questions before they move through the vetting process. Questions like how much support they will get from the franchisor when something goes awry, and how much planning you have done to mitigate risk.

In this article, you’ll find a full breakdown of examples of crisis management for franchisors, building a crisis management response plan for your system, and communicating effectively through challenges.

Franchise Business Review has 20+ years of experience in franchise operations and has supported more than 1,300 franchise brands in improving their system and overall franchisee and employee satisfaction. We want every franchise owner to feel confident and successful in their business, and that includes through any crisis or challenge that may arise.

What Can Happen: Franchise-Specific Crises

Although all businesses must have some form of crisis management in place to succeed, there are some franchise-specific crises to be familiar with as a franchisor. These are not mentioned to instill fear, but to create awareness of the value in planning ahead.

Operational Disruptions

Unexpected crises such as natural disasters, supply chain disruptions, or pandemics (oof) are part of the unplanned challenges that can disrupt or even completely halt your regular franchise operations. 

Legal and Financial Crises

No matter how well-run your business may be, lawsuits, financial instability, and franchisee disputes can arise in your system, creating costly, time-consuming challenges to the success of your brand.

Reputational Crises

More and more common (and feared) for franchise brands is a reputation crisis. Social media backlash from an angry online mob? Data breaches that create distrust? Negative publicity from one disgruntled customer? All challenges to be addressed in your crisis management plan.

Steps to Develop a Franchise Crisis Management Plan

With an awareness of what kinds of crises you’re preparing your system for and how planning can help to mitigate them, the next step is to create your crisis management response plan so you can effectively lead your team through the challenges that may arise.

Assessing Potential Risks

Assessing potential risks means thinking about what could go wrong and understanding what risks would exist for your company if they did. Is your company dependent on daily food deliveries to continue running smoothly? If your brand received social media hate, is your marketing team equipped to handle the response?

Assessment can involve your leadership team, various departments, and you can even directly involve your franchisees or Franchisee Advisory Council (FAC) when handled sensitively. The goal is to align everyone on preparing and planning so you have the flexibility and skills to manage crises as they come.

Establishing Clear Protocols for Crisis Response

Once you have a clear picture of potential risks – from floods to robberies to loss to lawsuits – you can begin planning clear protocols and response strategies. Map out the steps you would want each part of your system to follow if any of the potential risks were to occur.

The trick here is to remember that a crisis can be made worse by confusion, so the clearer and more detailed your steps are, the better people will be able to follow them when times become difficult. Have clear expectations and reporting structures in place in this document as well. Video guides may even be helpful. 

Have this document readily available and easy to find for anyone in your system. Remind people that it exists regularly, so if something came up, the first thought would be to refer to your clear protocols and response plan.

Creating a Crisis Communication Strategy

Communication is everything in a crisis. Who to communicate with, how to communicate effectively, privacy and reputation considerations… It all connects to your communication strategy. Include all of these details in your response plan.

Consider how to communicate internally with your franchisees when certain crises arise. Focus on keeping your brand aligned on your mission and perhaps even communicate a little extra about the support available to franchisees through specific challenges. You want your franchise owners to feel supported and confident in you as you manage a company crisis of any kind.

In your response plan, it’s wise to also consider the kind of communication you would provide externally to customers or stakeholders. Having clear communication points ready for potential crises will make your reactions faster and free up capacity to focus on solving the problem itself.

Effective Crisis Communication for Franchises

Here are a few ways to communicate more effectively as you navigate through a crisis.

Transparency and Timeliness in Communication

Communicate quickly. Don’t wait until everything is sorted out to share with your franchisees. Timely communication can create a more trusting, aligned culture than keeping your owners in the dark. The importance of transparency through a crisis is also paramount. People value when leaders are up-front, especially when honesty and communication are already a core part of your brand’s culture. 

Leveraging Technology for Rapid Updates

AI-driven solutions and technology can actually help speed up your communication and make a crisis feel more manageable. Social media can be a quick and accessible tool to communicate with customers. Predictive AI-driven analytics can help create estimates on resolution timelines, and can help you analyze your response plan for improvements.

Training Franchisees on Crisis Communication

Don’t wait for a fire or PR disaster to get your franchisees aligned on your plans! Incorporate crisis management training into your onboarding process and your regular coaching sessions with your owners. This will not only align your system, but it will also show how much you care about your franchisee’s success through any challenges that may arise.

Maintaining Operational Stability During a Crisis

While you manage a crisis, your business will almost always need to continue operating. Here are some valuable insights into maintaining operational stability while dealing with a challenge in your system.

Supporting Franchisees Through Difficult Times

Franchisees who are supported are far more likely to stay operational through tough times. Educational resources that are easily accessible, support with financial assistance if needed, and flexibility are all things that you can provide as a franchisor that will help your franchisees through a crisis.

Checking in on franchisees using pulse surveys is a simple way to support and encourage your owners through crises. Pulse surveys are short and simple, with questions like “What is your biggest/most immediate concern through this challenge?” or “Were you aware the following resources are available to support you?” This form of communication can be a great resource during emergencies, natural disasters, or economic hardships.

Leveraging Technology for Remote Operations

Communication doesn’t have to be in-person to be effective. Technology-driven solutions can be helpful in communication with remote locations, customers, or franchisees. 

Here are some examples of technology supporting communication:

• AI chatbots trained on your crisis response plan can answer questions
• Social media can communicate with consumers quickly
• Data dashboards can track progress towards recovery goals
  

Revisiting Supply Chain Resilience

A flexible supply chain is a resilient supply chain. Planning for disruptions or changes to your supply chain and having a response in place will drastically reduce your supply chain challenges, even when crises arise. Analyze your current supply chain and plan for disruptions, look at alternative sources, and discuss these plans with your system.

Case Studies: How Franchisors Managed Crises Successfully

The Learning Experience (TLE) franchise is a great example of a brand that successfully navigated the COVID-19 pandemic and even saw customer experience survey results improve. When the pandemic hit in early 2020, the TLE centers experienced enrollment challenges. However, they quickly shifted their focus to providing quality childcare for the families of first responders and healthcare workers.

Due to their transparent communication and ability to respond quickly, the customer experience survey results saw a boost through this hard period. It’s a great example of how being ready to evolve when challenges arise is felt by your customers, as well as your team and franchise owners.

A big part of being responsive and quick to evolve in times of crisis is having excellent communication and quick planning skills. Restaurant franchise brands that shared direct guidelines for how to navigate the COVID-19 pandemic saw improved franchisee loyalty and mitigated financial struggles. When you have the right planning, leadership, and communication channels in place, navigating a crisis becomes more straightforward.

The Value in Preparing Your Franchise for the Unexpected

Planning for the worst is not exactly a fun process. But it’s a lot more fun than being caught with no plan or communication strategy when something unexpected happens! 

Discussing disasters or worst-case scenarios is actually a positive thing in your company culture. You want your employees, franchise owners, and customers to know you are ready to evolve and move through challenges to continue to serve and succeed.

Don’t forget to regularly check in on your crisis management plan, communicate about it with your entire franchise system, and keep your ear out for potential crises that you could add to your plan. Prepared is the enemy of disaster!

Interested in improving your response plan or creating a new crisis management plan for your franchise? Join us at the FBR Summit in Austin, TX, this October for tailored advice on effective franchise operations and crisis communication.

The Only Event Designed Just for Franchise Operations & HR Teams

How can you make an immediate and lasting impact on your franchisees’ success? Find out at the FBR Summit, October 28-30 in Austin, TX. The Summit is an intensive, franchise industry event created just for operations leaders and their teams that directly support franchisees. Don’t miss it!

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