Creating Value for Franchisees in the Midst of Uncertainty
At 2:04 a.m. on April 3rd Lendio’s CFO sent the rally cry across the business to explain how our franchise program needed to shift gears to support small businesses during the pandemic, I’ll admit I greeted the email with a bit of trepidation.
I’m sure I wasn’t alone in that emotion. And although we’ve come a great distance since those early days of initiating the Paycheck Protection Program (PPP), it’s not hard to remember how things changed so dramatically almost overnight.
Our franchise program, Lendio Local, allows small business owners to apply for loans through Lendio’s online marketplace while consulting directly with a Lendio representative in their community. Historically, this program has focused on demand rather than supply — meaning franchisees are actively looking for small businesses in their community who need our help. When COVID-19 hit, our whole approach was suddenly flipped upside down, as thousands of small business owners sought help in the form of government relief funding.
Luckily, the apprehension we felt around reinventing our business model almost overnight was coupled with a sense of excitement and purpose. My team and I knew we had the chance to make a real difference in the lives of so many people during a time of tremendous stress.
We knew there was a great opportunity to serve by adjusting our business practices. We also knew that in doing so, we could provide a profitable opportunity for our franchisees, who are small business owners themselves.
Here’s how we did it.
We listened to their concerns
One of the greatest strengths of the Lendio Local franchise owners is they can build partnerships at a very high and local level with businesses, banks and networking organizations like BNI.
Our program is distinctly different from other approaches to small business lending. Lendio empowers local agents to use its online platform to help local small business clients get access to capital. To do this, we harness a high-tech online application and loan matching platform while also offering the face-to-face, consultative approach you’d find at a community bank.
But as we all know, the pandemic quickly shut down the stalwart practice of meeting face-to-face.
Our Lendio Local franchisees operate in their own territories, spread across the country. We work hard to communicate and prevent anyone from feeling like they’re working on an island; but it happens. When COVID-19 hit and we all headed off to our separate home offices, we found ourselves in their shoes. This helped us as a franchisor understand how we could better communicate with and serve our franchisees.
We began by streamlining questions and answers through a dedicated Slack channel and tweaked our internal communications with near daily updates so that the information going back out was clean and simple.
To try to allay some of the marketplace uncertainties our franchisees were feeling along with their small business customers, I chose to defer April monthly fees until later in the year, offering at least a small reprieve on their expenses.
We empowered, not pressured, them
In the beginning, I’ll admit we were scrambling to piece together this new puzzle: trying to figure out how to hire enough people fast enough to manage the frenetic pace of inbound calls. Early on, we made a good decision to route some PPP loan inquiries over to our franchisees in the local markets, rather than trying to handle them all at the corporate level. This way, somebody “in town” could walk these small business owners through the PPP application process.
This new approach required extra finetuning, especially since we all, both at the corporate and franchise level, were having to quickly become experts on a program that hadn’t even existed two weeks prior.
I shared a message with our franchisees to discuss this exciting new opportunity to help save small businesses across the country. Our note encouraged them to participate, but did not mandate it.
The response was overwhelming. Although they did not need to comply, they wanted to participate. Their willingness to adapt and meet the moment spoke to the strength of their character, and it showed that they believed in the cause. Everyone was excited to get behind our adjusted motto of “Saving the American Dream.”
Once we confirmed their willingness to participate, it was on us to deliver the right resources, support and empowerment to do their jobs effectively. This entailed extensive training, near-constant government watch-dogging, and regular updates — sometimes many times a day.
Although Lendio is a large organization, the franchise division represents a minority of overall operations. So, replicating our new PPP loan application to fit the program was a unique challenge.
We quickly worked to provide as many of those resources as possible, as well as coaching, new tools for questions and answers and near around-the-clock responsiveness.
And it didn’t stop there.
We were flexible in the moment, and continue to be
We’re proud to say that the first 38 small businesses we saved were our own franchise locations. Because we created a significant revenue stream for our franchisees, we enabled them to not only remain operational but also to grow their operations. While so many small companies were having to adapt their services and offerings to stay in business, or they were undergoing layoffs, we were helping our franchisees to onboard dozens of employees. All of this in turn meant they could help thousands of other businesses to stay afloat.
There are other great examples of this all across American franchises.
I loved reading about Dickies BBQ Pit, which recently changed its business model to allow franchisees to create a virtual kitchen. This in turn is increasing the speed to market, reducing the upfront investment costs for brick-and-mortar shops and expanding employment opportunities.
Our ability to meet any challenge rests on our willingness to meet the moment.
Luckily, this model can be replicated
Whether it’s continued economic strife, or another unnamed challenge that lies ahead, we know that uncertainty will meet us once again.
If your program has survived, or if you’re in a rebuild stage, I urge you to use this guidance to continue to create value for your franchisees.
By keeping open lines of communication, empowering your experts and remaining flexible, companies can not just do right by their franchisees, they can keep them profitable.
