In an era defined by unprecedented uncertainty, the need for businesses to cultivate resilience against a myriad of threats has never been more pressing. From the insidious menace of cyber attacks to the capricious whims of economic downturns, environmental catastrophes and global pandemics, the landscape of risk to businesses is vast and varied.
Add to this the spectre of war, along with disruptive upheavals wrought by emerging competitors, and the need for organizations to fortify themselves against future shocks is underscored in red.
The ability to anticipate, adapt, and withstand adversities in a dynamic and unpredictable landscape is paramount if franchises are to thrive. Resilience has emerged as a cornerstone of organizational survival and success, with the most successful businesses being those that have not merely weathered storms, but thrived in the face of turbulence.
You don’t have to delve too deep into the franchising sector to find shining examples of resilience in action. Drawing from battle-tested wisdom and insights of a cross-section of franchise leaders, we explore the strategies, principles and philosophies that underpin successful brands, from robust crisis communications to entrepreneurial acumen and foresight.
Learn from experience
Ray Titus, founder and CEO of United Franchise Group, has been through it all – pandemic, wars, recession and every crisis in between – and come out stronger the other side. “Good times are always the best time to prepare for the worst,” is his advice, a lesson he’s learned through decades of experience.
With over 1600 franchisees in more than 60 countries business is booming, but in 2008 the worldwide financial crisis delivered a hard knock to Signarama, one of UFG’s flagship brands. The recession of 2008/2009 was the worst in our 38 years of business,” said Ray. “It seemed like it was never going to
get back to normal times. I learned so much during that period.”
Signarama’s eventual bounce-back was testament to its ability to divert strategy and respond quickly to opportunities presented, but it required proactive teamwork and agile leadership.
“We focused on working with the companies that were willing to spend money,” Titus explained. “They are easy to spot on billboards and TV commercials. We looked for the ‘silver linings’ and promoted the success stories to our team to boost morale and we facilitated any good ideas out to the system. And, importantly, we helped our key customers through it all, so they would remember and stay with us.”
The crisis shaped the franchise’s approach to risk management and contingency planning, which has further evolved since experiencing major crises like the pandemic.
“The biggest key is to save money when times are good,” continued Titus. “We have a strong saving plan each year and implemented Profit First from Mike Michalowicz. The answer is to work with and train owners to be prepared for down times. We must lead by example, spend our resources wisely and save for bad times. We never know what’s next, but we need to constantly question today and prepare the best we can for tomorrow.”
For Titus, the secret to surviving curveballs and thriving in a volatile business world hinges on both market need and open-minded leadership. “Have a great business that people need and listen to the franchise owners,” he advises. “You must always be brand building and looking at ways to connect with the owners and if you make a mistake, admit it and own it, then correct it and move forward.”
Lessons learned from surviving recession
As CEO, Ray Titus navigated Signarama through 2008’s devastating global financial crisis. He shares his takeways from surviving this difficult patch:
- Stay positive with everyone, even when times are terribly negative.
- Get back to basics and what made you successful. Sales are the key.
- Focus on cutting unnecessary spending – every little bit helps.
- Calm down and don’t rush into making a bad decision.
- Review your assets. Consider borrowing against them, or selling some.
- Promote the success stories.
- Get face to face with all your customers and leads.
- Speed often wins. Make incisive decisions.
- Review all expenses weekly and negotiate everything.
- Work closely with your CFO. We met every day!
Build franchisee resilience
There are many proven business strategies to build resilience for future security, but franchising has a distinct advantage – its unique model.
“Franchisors should be encouraging their franchisees to follow their own proven systems, as they’ve often spent years perfecting operational processes, business planning, sales and marketing tactics, staff training and development, customer service levels, sharing best practice between franchisees and embracing innovation,” advised Julie Wagstaff, MD of ActionCOACH UK, the world’s number one business coaching franchise.
But while they should take advantage of all the support on offer from their franchisor, franchisees must also be held accountable for the success of their own business.
“Franchisors should be encouraging their franchisees to adopt a strategic mindset, to keep their finger on the pulse of local markets, and to focus on core areas to build a resilient business,” she continues. “This includes regularly reviewing financials, operations and market trends and managing cash flow carefully. Using forecasting tools and keeping cash reserves for unforeseen expenses is critical to any business’s ability to withstand shocks.”
Julie also urges franchisees to network with other business owners and professionals outside the franchise network. “While sharing best practice within your network of fellow franchisees is fantastic, new collaborations can open more channels and opportunities for growth and stability,” she advises.
Avoid reputational damage
While franchising systems provide many advantages, there’s one obvious risk for a franchisor that other businesses don’t have to deal with – its network of franchisees.
“The most common crises I’ve seen resulting from the actions of a franchisee is where they manage to hide things going wrong operationally and financially in the business rather than asking for support in the early days of difficulties,” explains crisis communications specialist and co-founder of Rev PR, Sally Anne Butters.
“Whether it’s due to ego, negligence or just plain embarrassment, the issues are not shared with the franchise team and become too big to remedy, resulting in the business having to be rescued by the franchisor, or closed in the worst cases. The negative fallout in terms of dissatisfied customers, jobless staff and reputational damage can spread far wider than the franchisee’s local area.
“We recommend all franchise brands have a crisis comms plan and prepare holding statements and comms processes for common risk areas, but this is particularly important for those providing services or caring for children and the elderly – you can imagine the potential for a media crisis with these types of brands,” adds Sally.
“As a crisis comms specialist, it’s not up to me to interfere in the franchisor’s systems of operation but one thing I do insist on within my projects is that they have a robust risk register to flag struggling franchisees at an earlier stage. That could be through financial management data, physical touch points or satisfaction surveys.”
Case study: Apex Leadership Company
“How we tripled our revenue growth after COVID hit us hard”
Jamie Krasnov, CEO
When I took over Apex Leadership Company in 2021, the brand was still reeling from the impact of the pandemic which had shut down in-person learning and fundraising activities in schools, taking its toll on our franchises.
The first strategy was to revitalize Apex’s executive structure. We expanded our marketing team, hiring key leaders with experience in boosting brands across different industries. We brought on a seasoned franchise development executive to support our franchisees on their road to success.
And we assembled a group of experienced franchise investors, consulting and leveraging their knowledge to implement best practices to propel Apex forward.
Whether looking for franchisees or new leadership hires, we strategically prioritize individuals who are resilient, deeply passionate about our mission and aligned with our company vision. This hiring approach has been pivotal to Apex’s success. I believe when you onboard individuals who share your commitment to making a meaningful difference, everything tends to fall into place. At Apex, this means fundraising for schools and nurturing tomorrow’s leaders.
As a result of these initiatives, we’ve been able to provide franchisees with a robust home office, unwavering support and fresh ideas on how to expand. All these efforts are why Apex generated an outstanding 200% revenue growth, expanded presence into new markets and raised a record of more than $60 million for schools a year.
Putting people first pays back
When staff turnover rates are high, it can throw a wrench in operations, drain resources with constant hiring and training, and leave companies scrambling to fill gaps in knowledge and expertise.
On the flip side, having a stable team that’s committed to the cause can be a game-changer, fostering consistency, boosting productivity, and making it easier for businesses to adapt to whatever curveballs the market throws their way. Essentially, the rate of turnover plays a crucial role in determining a company’s resilience.
By prioritizing things like employee development, cultivating a positive work culture, and offering attractive perks, companies can keep their best people for the long haul. And that’s not just good for team morale—it’s a smart business move that pays back long-term.
Visiting Angels was established in the U.S. in 1998 and has grown into a global care giant with communitybased values. Today, the home care franchise is one of the largest care franchises in America, supporting more than 850 franchisees across five countries.
But what makes Visiting Angels particularly resilient within its sector is its carer-centric approach. When the brand launched in the U.K. it set out to specifically address the U.K. care sector’s key challenge to its resilience – recruiting and retaining care staff.
By keeping these carer-centric values at the center, Visiting Angels has built a network of franchisees across the country and maintained an exceptional staff retention rate – the care staff turnover is down at approximately 12% compared to the sector average of around 70%, creating a more stable business to provide continuity of care for clients.
“When we launched in the U.K., we could only be carer-centric by repeating none of the mistakes other providers were making,” explains Visiting Angels U.K. CEO Dan Archer. “We analysed what was wrong with the sector and what we needed to do differently to fix it.
“Our market research involved looking at close to 50 care business competitors – franchises, corporate and independent. We found that all of them had service-focused mission statements, which did not make sense to us as we operate in a people industry. So, our vision, mission and culture were developed exclusively for the benefit of our caregivers.”
Central to the brand’s ethos is to address this problem. “Part of the solution is retaining valuable team members with a raft of innovative solutions, rather than relentlessly recruiting. We haven’t prioritised staff retention; we’ve prioritised rewarding staff fairly, which results in better staff retention,” says Dan.
“We’ve done this from day one, leading us to our mission to lead the U.K. care sector as an Employer of Choice by 2030, creating an environment where our carers can care more, clients can live better, and families can feel assured.
“Staff who are competent and confident in their skills can better cope with the high demands of the care sector, contributing to a more resilient organisation which can sustain operations during difficult times. We place carers before anyone else, providing specialist training, a clear career path, numerous perks and rewards, and wages above the national average.
“Our culture is paving the way for the future by reducing staff turnover, which enables families to choose their own caregiver and ensuring stability, continuity and quality of care.”
Damage limitation
Solid pre-crisis planning will make a business more resilient, but what steps should a franchise take to ensure it’s well prepared? Sally Anne Butters shares her three-step plan:
1. Create a crisis comms plan
Share it across the business, highlight elements during your initial franchisee training and review it regularly. Once you’ve got a plan, crises can still arise but you can react quickly and with intention. Having draft holding statements for stakeholders and the media for key risks means that in the event of a crisis, you’re not starting from scratch.
Creating these in advance gives you time to reflect on the appropriate way to phrase responses and what methods to use to share those out. You can then add key details to tailor should the need arise to use them.
2. Maintain a risk register
This should be a live document available to your management team, kept up to date as new information arises and reviewed in a monthly team meeting. Creating a crisis comms plan will allow you to determine common risks within your business and the general environment within which you operate.
Alerting your team to these common risks helps them to identify and log issues with the potential to escalate into a crisis on your risk register, giving you the chance to also de-escalate quickly with appropriate support.
3. Have a centralized crisis communication strategy
A good franchise network thrives on mutually beneficial outcomes. In the case of a crisis, people can be nervous to face the media as the brand spokesperson, so I generally find franchisees are happy for the franchisor to offer to step in to manage stakeholder communication.
They will often compose statements from head office, share with the franchisee and use local systems to share with the location’s stakeholders. Then head office can move on to communicate more widely as appropriate.
