Preserving Liquidity And Debt Relief Options During COVID-19

The impact of COVID-19 has been devastating to communities and businesses throughout the world. Nowhere are its effects more acute than in franchising. Since the pandemic began, it has caused a strain on multi-unit franchisees who are scrambling to keep the doors of their businesses open, finding new ways to conduct business, and paying employees.

Carty Davis, a partner with C Squared Advisors, shared some thoughts on how multi-unit operators can preserve liquidity and find some debt relief. These tips are both timely and relevant and come from someone who not only has banking and investment experience, but who is also an area developer and multi-unit franchisee of Sport Clips.

• Cash is king in your ability to maintain your going concern value. If you haven’t already, it’s time to update your cash flow projections and determine your cash flow needs over the next 30, 60, 90 days and determine which expenses can be reduced during this time. Challenge discretionary costs without compromising operational excellence and cleanliness and put non-essential initiatives on hold until things stabilize and get back to normal.
• Closely monitor relief and assistance packages that are being discussed and provided for at all levels of government. Restaurant leaders have done a fantastic job communicating and explaining the most critical needs of our industry. Expect to see new bills, amendments, and aid programs announced over the coming days and weeks and make sure to assist your employees in applying for available and evolving benefits.

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