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Being a Franchisee in the Age of Pandemic

On Behalf of | Apr 26, 2020 | Franchise Law News

In his March 27, 2020, Franchising column, Ronald Gardner offers proactive steps franchisee representatives should be taking during this “sea change” caused by the COVID-19 pandemic.

The original plan was to write a column about Item 19 of the FDD, and how to interpret this most critical item, and how to maximize getting good information when looking to buy a franchise. But like all other plans for the month, this one needed to be changed in response to the COVID-19 pandemic.

While no one really knows when or how long the virus will be ravaging the planet, or how long it will take for things to get back to “normal,” as of this writing what we do know is that the market is a bear, there is no Madness, and the Green Jacket will be awarded at a later date. In other words, the world we lived in three weeks ago has changed dramatically—and for the foreseeable future.

This sea change will be a challenge for everyone. And as the foot soldiers on the frontlines of our consumer-driven economy, franchisees in certain industries are feeling this impact swiftly and severely. Initially, we will continue to see franchisees in the hospitality business suffer a significant downturn, as meetings, conferences, and vacations are postponed or canceled. Restaurants are also suffering a significant downward shift in demand, which is likely to continue over the coming period. From there, depending on the business of the franchisee, we will likely see continued deterioration of all businesses where direct customer interaction is required (e.g., car repair, gyms and fitness centers, specialty stores, etc.). In short, it’s going to be a rough ride.

Read the entire article in the New York Law Journal on what proactive steps franchisee representatives should be taking.

*NOTICE: This article is intended solely for informational purposes and should not be construed as providing legal advice. Please feel free to contact us with any questions you may have regarding this article.