Article

Ride the Covid Wave or be Wiped out by it !

July 18, 2020

Life now and post-Covid, will never be the same as pre-Covid, this is a reality that we must now deal with in our daily personal and business life and more importantly, must now start planning for the immediate and long term future.

Focusing on the QSR franchise businesses, I believe big, medium and small franchises, are very busy trying to adapt the new normal by shifting their systems towards delivery, take away and pick up to compensate the loss in their revenues due covid confinement and closing of the dine-in business. Many of these franchises and local businesses where in a good position to quickly adapt because delivery and take away was already a big part of their business pre-covid and they had the necessary infrastructure and tools, to switch system mode quickly and minimize revenue loss, some even had sales increase and continue to do so. Other franchises and local restaurants especially causal dine-ins and fine dining who delivery and take out business was not considerable pre-covid, are seeing difficult times and are in a shock mode in my opinion. They need to act quickly and come up with innovative ways to gain back the lost revenue and gain back their own existence. Unfortunately, many will not survive the covid wave and will be wiped out in the early stages of the battle against this wave.

The life we are living today with covid, will stay with us for at least until a vaccine is found (which can take up to 2 years) add to that, the time to vaccine the world’s population. Let us assume a vaccine is found today, how long after will we go back to the life we were living pre-covid? The big question is, will we ever go back to the life pre-covid?

Getting to coop with current sudden change to life, to the way we do business and to consumer behavior is one thing and looking ahead and planning for the future is another and more important thing.
Businesses that have survived thus far need to ask themselves:

    1. Where is the restaurant and franchise industry going?
    2. How can we save our brand and our franchisees from being wiped out by the wave?
    3. What changes and modifications should we introduce to our system and business model?
    4. How will our future stores look like?
    5. Do we keep growing and keep selling franchises based on the existing business model?
    6. How do we turn this great threat, into an opportunity?

We will see many businesses closing and many new businesses pop up. Location, location, location will no more be one of the important factors in the success of a restaurant or a franchise business, secondary or even remote locations can do the job of preparing and delivering the same product to a customer happily sitting on the comfort of his/her couch or at the desk. Not so good for landlords of key locations as the table is now turned where tenants have the upper hand, there will be great deals on key locations’ rents in the months and years ahead.

There is a lot more to say but to conclude, I say, it is imperative that those who have survived the first stage of the wave to think outside the box and think now how to adapt to the new normal and be a pioneer in the introduction of new ways, menus, systems, store layout and services compliant to and in alignment with the new normal.

Winners will be those who understand the need for immediate change and adaptation but also who will ride the wave and take full advantage of it to be ahead of others by being creative and innovate new methods, models, systems and services to cater to an old but new customer whose life, priorities and choices have also changed.