Why franchisees are best placed to recover from the shutdown and consequent recession

By Mark McGinley | 25 Sep 2020 View comments

Being a franchisee offers many advantages, including working for oneself while operating under a well-known brand and a proven business model with tried and proven systems, processes, and marketing and financial support.

While thousands of businesses are struggling in the current tough conditions, franchisees are in a better position to cope with these challenges – particularly those operating under an established brand.

CouriersPlease (CP) has been extremely fortunate to be considered an ‘essential service’ during the Covid-19 pandemic, continuing to operate alongside the rest of the logistics industry.

In fact, the boom in online purchases translated into a boom in new business for our franchisees. We have doubled delivery volumes in some sectors, particularly those retailers with a mature online service offering, and our fleet of more than 750 franchisees have never been busier.

Agile approach helps franchisees

To handle the overflow of work, a proportion of our franchisees made the decision to generate more income by working longer hours and making more deliveries, buying larger vans to accommodate for more parcels, using extra vans they may own and hiring more delivery drivers.

CP operates a productivity-based model whereby CP franchisees are paid per successful delivery. For franchisees who had significantly reduced delivery volumes – such as those who cover the CBD region – we were able to divert them to work in residential areas with booming delivery volumes that could not be fulfilled by the existing CP franchisee in that area.

Our agile approach during the height of the pandemic saw us optimise our operations, which put our franchisees in a favourable position.

Benefits of the franchise model

The phrase ‘strength in numbers’ encapsulates a key benefit of the franchise model: having a large network of franchisees behind you and a parent company that looks out for your best interests.

As a result of this business model, our franchisees have the ability to pick up work in areas that are booming and cannot be fully serviced by the existing franchisee due to overflowing volumes, an advantage independent delivery businesses do not have.

CP franchisees can sustain and generate an ongoing income even at a time when business is quieter due to drop in activity in their zoning area.

If it were not for a proven franchise model, with a 30-plus year legacy, to lean on, we might have seen some franchisees struggle to stay afloat if they operated as a sole trader.

New courier franchise opportunities

Owing to our growth over the last few months, we are in the strong and fortunate position to be seeking new franchisees to join CP.

Some areas around the country have unprecedented high volumes of stock fulfilment that we are recruiting quickly to cope. For example, in Newcastle, we recently doubled the number of franchisees in the area to meet demand.

Our franchisees have not been immune to experiencing challenges during the pandemic, as with many other businesses. However, being a franchise model, CP can offer various support measures and guidance on navigating the new environment, allowing our franchisees to focus on their business – a priority for us at any time, but ever-more so now.

How CouriersPlease supports franchisees

We’re really proud that our support team acted quickly to develop and implement stringent safety measures and processes to ensure the safety of our franchisees, employees, and our customers.

As part of this, we introduced social distancing measures, sanitation stations for vans, issued franchisees and customers with hand sanitiser and face masks, and staggered franchisee times in our depots – minimising the number of people present at the one time and, in turn, staggering parcel collection times.

We also introduced new technology for contactless returns and deliveries to help minimise the spread and use minimal touchpoints when delivering parcels to consumers.

CP has also become a registered Covid Safe business in NSW.

By having a franchisor that can work swiftly to develop systems that adhere to guidelines the Government has put in place, our franchisees have been able to focus on deliveries instead of creating processes and guidelines. CP has been committed to supporting our franchisees during this unprecedented situation.

Franchisor support helps franchisees in tough times

Some businesses – particularly those in hospitality and tourism – haven’t come out unscathed during the consequent shutdowns during the pandemic. We have seen independent restaurants and cafes, for instance, forced to shut due to social restrictions and lack of customer activity.

While some franchisees have also struggled to stay afloat, they often have the support of their franchisor to provide assistance and guidance – putting them in a better financial position.

For example, some franchisors won’t charge fees or marketing levies during this challenging time. Some also offer their franchisees financial advice around grants and Government schemes such as JobKeeper, or provide support to get a loan. With rent one of the largest ongoing expenses, franchise businesses often have the band power to leverage the size of their business operations and negotiate on rent reductions on behalf of the franchisee.

At CP, we have always had, and continue to have, measures in place to provide financial support to our franchisees, which sees them handle a minimum number of parcels each week to ensure they don’t fall below a certain income. During the pandemic, we introduced a support package to ensure franchisees are looked after, should they get Covid-19 and be unable to work.

Having the support of a well-trusted franchise model can be a real advantage at this time. The franchisor should be able to absorb many of the burdens that small businesses face. They can provide financial, administrative, operational and marketing support to help them navigate through these uncertain times allowing franchisees to focus on their core business.

Mark McGinley scored a top five slot in the Top 30 Franchise Executives Report 2020 – you can download your free report here.