Franchisees Turn Focus to Reopening Plans
The picture first painted by the franchisees was far from rosy.
“Right now, every single one of our locations is closed,” said David Humphrey, CEO of ECP-PF Holding Group, a Planet Fitness franchisee with 103 gyms. “We’ve laid off over 1,400 people, so I feel your pain.”
“One hundred percent of our stores are closed, we have no revenue and we’ve laid off almost 800 employees,” said Matthew Patinkin, an Auntie Anne’s and Cinnabon franchisee with 90-plus stores.
Despite their situations, however, Humphrey and Patinkin, along with Merry Maids franchisee Michael Isakson, are focused on how they can position themselves now for a strong reopening, and shared advice during a webinar hosted by the International Franchise Association.
Like other fitness franchises, Planet Fitness is providing online classes, “work-ins online instead of workouts,” said Humphrey, as part of a broader “United We Move” campaign aimed at staying engaged with members.
“I’m a huge believer that you always have to stay customer-centric, especially in a time like this,” said Humphrey. “It’s absolutely life and death in today’s world that you be connected online.”
Though he’s cut almost all advertising spending, “what we haven’t cut is digital, the online, the social media,” noted Humphrey. He encouraged franchisees to get creative with targeted online sales, such as merchandise, that reinforce the brand and get customers thinking about returning when doors reopen. Maybe it’s an at-home workout kit with a gym bag and yoga mat. “Even if they don’t buy it, they see the message and it’s a nice touch,” he said.
Franchisees across all segments, the panelists agreed, must understand that when they do reopen their businesses, they’ll be operating in a different world. With many global economists forecasting a recession, consumers will likely tighten spending, which to Humphrey means operators must think about “maximizing your share of wallet.”
Planet Fitness is in a lower price category of gyms, and Humphrey expects consumers will be looking to “trade down” from higher-priced gyms as they rein in expenses.
While Humphrey and Patinkin both have dealt with employee layoffs, they’ve made a point of continuing to communicate with staff as they focus on plans to reopen without then having to hire an entirely new workforce.
“I never dreamed that anything like this could happen … and nothing matters to me more than reopening our stores and rehiring our workers,” said Patinkin. Franchisees need to set the tone with their teams, he continued. “This is the time when you need to step up like never before.”
For Patinkin that means overcommunicating, but with a clear purpose of providing information, helping general managers facilitate conversations with employees and turning the conversation toward what operational changes need to be made.
“In food settings you have to think about how to serve customers safely and protect employees,” he said. Will people wear masks? Do you need to install protective shields? Franchisees, said Patinkin, need to make it their mission to visibly show how they’re working to protect employees and also steps they’re taking to help customers feel safe and healthy.
Financially, “don’t be blind,” Patinkin stressed. Run sensitivity analyses to gauge impacts on the P&L, along with week-by-week sales scenarios, keeping in mind “it’s probably going to be a lot slower than you think.”
While franchisees should be doing all they can to preserve cash, the cost of reopening, including potentially training new employees, can’t be ignored, said Patinkin, and neither can the need to treat store openings like the big deal they are.
“I want to treat every reopen like it’s a new opening,” he said. “This is going to be the biggest grand opening you’ve ever had.”