Don’t stop marketing, development during a crisis
It was the second week of March when Nick Pesko says he noticed the first batch of “Our commitment to you during COVID-19”-type emails hitting his inbox from just about every brand he’d ever interacted with.
Pesko and SoBol, the acai bowl and smoothie concept for which he’s director of marketing, wanted to get their message out, too, and communicate with consumers and franchisees alike. Pesko knew transparency would be crucial, especially with 37 franchisees whose businesses were about to experience major disruption.
“It’s nerve-wracking,” said Pesko. “They’re definitely scared with what is going to happen with their businesses.”
Long Island-based SoBol, whose model was already predominately takeout at its 41 locations, saw sales decline about 20 percent in the first few weeks of the pandemic, but, says Pesko, “we’re choosing to market and keep the brand in front of customers.”
That started with a letter from CEO Jason Mazzarone that detailed the company’s new health and safety measures, including removal of stools and self-serve coffee stations, enhanced cleaning procedures and health monitoring of staff, plus a shift to mobile and credit card payments. Customer-facing promotions have included special online ordering offers, and new email templates are tailored to SoBol’s various markets. Plus, the brand created targeted social media ads that franchisees could easily integrate into their local marketing plans to constantly remind customers that yes, SoBol is open. Two franchise stores are temporarily closed, said Pesko, one near the University of Pennsylvania campus because “there was nobody around to serve,” and another in Beverly, Massachusetts, where Pesko said the operator wasn’t comfortable staying open and was also faced with staffing issues.
“Our staff are high school students. A lot of parents are hesitant to let their kids leave the house,” he said.
Other franchisees, though, are helping drive new menu ideas.
“What I love about SoBol is our franchisees are super creative in how they want to sell their product,” said Pesko as he gave the example of a franchisee who started selling build-your-own family packs so customers could create their own acai bowls at home.
With takeout already a focus for SoBol, all but two locations are still open.
Pesko, along with SoBol’s leadership and franchisee support teams, are staying in constant contact with franchisees via email updates and personal calls, not only to provide marketing assistance but also demonstrate to operators how their royalty and brand fees are put to work.
“The royalty has definitely been a big topic,” said Pesko of discussions with franchisees, especially as news of royalty relief began circulating from larger brands. As a smaller, founder-led franchise, “we’re not funded by anybody but ourselves,” he continued. “Those royalties and every dime we put into our business is crucial.”
SoBol sent a detailed letter to each franchisee in March that laid out how royalty fees are used and it provided additional resources such as best practices for adjusting labor and scheduling based on operations at four company stores, along with tools on controlling costs.
“We decided, we have this really strong open line of communication, so let’s be as honest as we can with them,” said Pesko.
Don’t stop development
Bryon Stephens was vice president of new business development at Marco’s Pizza during the 2008 financial crisis when, as he put it, many franchise brands were scaling back growth plans but Marco’s “was the contrarian.”
“Everybody saw us grow during those tough times and they said, if they can continue to grow during that crisis, they can grow through anything,” said Stephens, who was later named president of the brand and helped Marco’s eventually grow to nearly 800 restaurants by the end of 2017. “We got some of the best real estate deals we’ve ever gotten because we were among the few opening new stores.”
The crisis brought on by the COVID-19 pandemic is of course drastically different, Stephens noted, but franchises need to be thinking now about how they’ll come out on the other side. “This is the time for smart people … to double down and really become aggressive with what you’re doing,” he said. “Be a contrarian” while others are pulling back.
Stephens is now the co-founder of Pivotal Growth Partners, which focuses on accelerating emerging brands. One of those brands, Florida-based frozen treats franchise Jeremiah’s Italian Ice, is moving ahead with store openings in the coming weeks and is also revamping its discovery day process to be entirely virtual.
“We’re modifying our grand opening programs basically to not include a grand opening event,” said Stephens of expected openings this spring in Florida, Arizona and Texas. The brand already moved to carryout and delivery at all 23 of its Florida stores, along with drive-thru where available, and new stores will open with that sales focus.
Creation of a virtual discovery day is helping Jeremiah’s Italian Ice continue development.
“Really the only announcement would be to turn on the open sign,” he noted. “We don’t want to drive a ton of foot traffic until it’s safe to do so. And we don’t want any public sentiment to work against us … it’s really about reading the tea leaves in each local market.”
While thus far Stephens said Jeremiah’s hasn’t seen a downturn in lead generation, “we’ve adapted quickly to change our discovery day process” and forgo the usual in-person visit to the brand’s Orlando headquarters.
Using the World Manager platform, a learning management system, Jeremiah’s created a new section specifically for potential candidates that includes all the information and presentations that would normally be provided during the discovery day. A complete reporting dashboard allows the franchise development team to monitor where candidates are at in the process, and video calls using Zoom “mean we can continue to create and foster the relationship,” said Stephens.
“Not being able to move people through the funnel is not an option,” he said.
Pesko, too, said SoBol is moving ahead with development plans and noted Robin Graf, the brand’s director of franchise sales, “just signed a new location” in mid-March.
“We’re not going to let this completely hinder every aspect of our business,” Pesko said.