For franchises operating abroad, flexibility reigns
Rami Awada, left, Which Wich’s master ‘zee in the U.K., with CEO Jeff Sinelli. Awada is retooling his London store before reopening.
When I spoke with David Shen over Zoom in mid-April, numerous businesses in Shanghai were still closed and tourist attractions shuttered as another round of restrictions were implemented to quell a feared second wave of COVID-19 infections.
“We can’t do any face-to-face training, even today, it is still locked down,” said Shen, a Dale Carnegie Training franchisee for China’s Shanghai/Jiangsu and Zhejiang territories. He thought perhaps by mid-summer that in-person training with corporations and in other public settings might resume, but until then—and likely even after—online classes will be critical to franchisees’ survival.
“The bottom line is we need to survive this crisis. We don’t get to decide when the economy will recover,” said Shen. “When I talk to our big clients, they’re doing cutbacks and layoffs. So we’re trying to adjust to their learning behavior. I think we have a new business model that’s going to continue for a long time.”
When the new coronavirus outbreak first started in China, Shen said he and the country’s four other Dale Carnegie Training franchisees began working closely together to create what he called their “One China plan,” a collaborative effort to share ideas and unite to present live online classes to clients and broader audiences.
David Shen is working with his fellow Dale Carnegie Training franchisees in China to provide virtual classes.
“Before COVID-19, we were running the business by territory,” said Shen, but the franchisees quickly realized the importance of a cohesive approach in maintaining trust and confidence in the brand. Together they’ve presented more than a dozen live online professional education and leadership classes, with more than 10,000 participants, “so we’re getting thousands of active leads,” said Shen.
“We’re getting very positive feedback … and it elevates our Dale Carnegie brand in the market.”
Shen and his fellow franchisees were able to quickly pivot to online classes thanks largely to the heavy investment in virtual offerings the brand made a decade ago, though until now the courses were only available in North America.
“In late January we started talking to our Chinese franchisees, and to help them we created a global task force,” said Joe Hart, CEO of Dale Carnegie with 200 operations in 86 countries. As the virus spread to South Korea and other places in Asia, “we expanded the scope of what we were doing.”
The online offering is far more sophisticated than the clunky video calls or disembodied talking heads so many people are experiencing for the first time these days as workplaces turn remote. “It’s not like Zoom or a webinar; it was whiteboards, breakout sessions, polls; the kinds of activities of what you might do in person. It simulates an in-class experience. So it was very difficult for the franchisees, for their trainers” to make the switch at first, Hart said.
“We ramped up quickly to teach them how to do it, to teach them how to sell it, and to support them as they took it to their clients. It really has now started to get traction.”
Being in the learning industry, noted Shen, the ability to tailor classes to individual customer needs is crucial, as is agility, areas in which he said Dale Carnegie excels. “If we hadn’t changed our structure and our strategies, we would have lost a lot of clients,” he said.
Nearly all of Dairy Queen’s restaurants in China are open, said Darren Miles, including this one in Chongqing, in the southwestern part of the country.
The ability to quickly adapt remains critical for franchises operating in international markets, especially as regions around the globe begin to slowly open up and brands sift through guidance from local, regional, state, provincial and federal governments.
“Reopening is not a simple process, it’s not just flipping your lights back on,” said Bill Edwards, CEO of international franchise development consulting firm Edwards Global Services. The supply chain and inventory management have been a “real challenge,” particularly for foodservice brands, he noted, and most big brands with annual marketing campaigns for limited-time offers had to adjust on the fly.
Dairy Queen did just that, according to Darren Miles, vice president international operations, as he noted the closure of dining rooms and resulting shift to drive-thru, takeout and delivery meant adjusting menus to feature items that traveled well while also developing new offerings “that took full advantage of unused product from limited-time offers and promotions.”
Combos, bundles and portable items such as DQ novelties and cakes were in demand, he said, and in Thailand, for example, franchisees sold do-it-yourself kits to assemble ice cream cones at home.
“As our Blizzard menu rotates seasonally and we were in the middle of transitioning from winter to spring flavors in many countries, our focus was on leveraging unused product to reduce waste and provide menu items that traveled well,” continued Miles. “One example in China was to use the ingredients from the Red Velvet Blizzard, that was a limited time offer, to create the new Red Velvet Shake, which was delicious and sold very well.”
Just as local restrictions varied widely as businesses around the world were forced to close to slow the spread of COVID-19, the pace at which economies are reopening and the guidelines they’re issuing as they do so are equally complex, said Edwards, whose firm monitors 20 franchise brands in about 30 countries.
“Latin America is still going into the bad part of this thing … they’re still not sure what it all means,” he said. “Brands have their local franchisees monitoring very closely what the local governments are doing.
In the United Kingdom, which in May reported the highest number of coronavirus deaths in Europe—more than 32,000—Rami Awada’s London Which Wich shop could have remained open for takeout and delivery, but the master franchisee for the brand in the U.K. opted to close March 20 and said for him, “It’s really health and safety and you gotta put people first.
“It’s not just your customer, but your staff, the delivery guy, your supplier,” said Awada, who as of mid-May hadn’t reopened but was exploring various scenarios. “This has to do with life and death, so I didn’t want to rush ahead without knowing the full situation.”
His AAA Investment House was slated to open its second location in May and a third later this year but now Awada is considering how he’ll “re-optimize” the design and operation of his shops to meet new health and safety guidelines. “We’ll start with contact-free delivery, limiting the number of staff working at once,” he said, along with other measures such as adding tamper-evident seals to close every order.
With a strong delivery program already in place, Awada is “analyzing every detail,” and while he expects delivery will return as a strong channel for the brand, he said online ordering for in-store pickup will likely surge as customers want to minimize the amount of time they spend in a restaurant. With that in mind, he’s exploring what he called “on-demand convenience,” providing both prepared items and grocery items for a grab-and-go option.
“It’s brainstorming more than ever,” he said.