Covid-19 is winding its way from one country to another, spewing as much disaster it can cause. Day by day, people and business sectors are witnessing unprecedented struggles. Industries like small restaurants and hotel chains are helplessly uncertain about the situation.
The American Hotel and Lodging Association has released an estimation of 3.9 million job losses in the lodging industry. Moreover, it has been predicted that the economic damage is going to be more severe than the 2008 recession.
Hence it is crucial to deal with this devastating situation with serious consideration. However, lodging industry leaders such as Best western hotels are taking new strategies to help their franchisers to survive the storm outrightly.
Moreover, Subway is about to provide short-term royalty relief for its franchisees and followed by that McDonald shaped an operational strategy to run a Drive-thru delivery mode.
But amid the various survival plans, markets are crashing down to the ground all across the world. In the U.S., hourly workers are experiencing drastic monetary loss by COVID-19. This financial crash is drying up in many cities in the country.
“We were hoping to make money this week to pay for things we already bought. Says Dan Williams, an executive director of PianoFight and a bar with 25 part-time employees. He further stated that his restaurant revenue dropped to 85% last week, and the theatre revenue dropped to 95%.
Anyway, in this event of a hazard, as a responsible partner of the hospitality industry and a young stakeholder of a lot of hostels and restaurant chains, we have curated some informative insights to help franchisers to help them to deal with this pandemic impact.
What is Coronavirus? Why does it matter to franchisers?
Coronavirus or COVID 19 is a disease that affects the respiratory system of the human body. In the initial stage, it is nothing less than a common cold or flu. But after 14–21 days of the symptoms, it gets worse and may lead to death.
Every being should be cautious about the disease, regardless of age. But it is more likely to affect infants and elder folks. It spreads through direct contact with the infected person, as the virus transmits by touching the surface contaminated by the infected person.
- Shortness of breath
When it is severe, it may lead to pneumonia or breathing difficulties. In older people with pre-existing conditions, the disease even turns out to be fatal.
For the franchisers, COVID-19 began to be a grave issue from February 24, 2020. When it was reported for the first time that there were more cases of COVID in Italy than in China, it was then clear for the franchisors that they can’t ignore it.
The rise in the number of deaths and the government struggling to deal with the pandemic tolled the franchisers. They realized the fact that they are going to get a hard time ahead.
For example, Donald Trump’s ban on flights into the U.S. from continental Europe troubled the hotel and tourist resort franchisers in consequence. This was a hard nut for the hospitality franchisers.
Though the spread of this virus is a huge deal, we are totally unaware of how it multiplies. But still, two things are crystal clear:
1. There will be a steep inclination in the number of cases
2. The steps taken to tackle the issue will harm the global economy.
This is what makes the franchisers to think in-depth about the solution to deal with Coronavirus.
This may also lead to the failure of businesses, which can further affect economic growth.
What can be the intensity of COVID-19 if it hits economic growth?
As almost every person on our planet is brawling with the pandemic Coronavirus. Economic growth is also trending towards instability, making this one of the biggest and threatening danger to the global economy after the financial crisis of 2008.
The U.N. trade agency, UNCTAD, has warned of the slowdown of global growth to 2%, which will wipe almost $1 trillion of the value of the world economic growth.
Around the globe, there are almost 170,000 confirmed cases of COVID-19, which emerged from Wuhan, China, is still spreading at an alarming rate.
Due to the factory shutdowns in China, businesses are dealing with a disrupted supply chain and revenue loss.
Even the most optimistic predictions foresee a slump in economic growth, which can be due to ‘seasonality.’ On the other side, the most pessimistic predictions suggest that the infected virus is not seasonal and that there will be a rapid geographical spread in the world, leading to a global recession.
How will COVID-19 affect the food and beverage industry?
Lisa Wehrle (a restaurant service employee) was called by her boss and told there wouldn’t be any job for her and her colleagues until further notice. And this is not an isolated case; around millions of restaurants service and delivery, workers lost their job overnight.
However, this phenomenon is not just limiting inside the hospitality industry; it is spreading across the industries more vigorously.
It is because the virus is more likely to spread in places like restaurants, coffee shops, theatres, and pubs, as these places experience a lot of social contacts.
Plus, the virus can stand active on surfaces like counters, cloths, metallic surfaces, dishes, glasses, glasses, containers, cell phones, money, and many more a long period. To date, it is unknown how long the duration of the active virus be.
Thus, all these facts add up to the impact that the food industry has with Covid-19.
Steps to reduce the risk of Coronavirus in your business:
- Induce a habit of washing hands regularly with sanitizers in your staff and implement stick hygiene policy.
- Frequently carry out health checks with your employees and encourage sick employees to stay home.
- Frequently clean and sanitize the utensils, and the surfaces of the equipment used regularly.
- Stick posters that tell the importance of maintaining hygiene and staying home if they are sick.
- Perform mandatory cleaning schedules all around the work premises.
- Inform the employees who are traveling to obey the CDC traveler’s health notice.
- Encourage employees to diagnose themselves often when they find an unusual symptom.
- Give proper guidance to conduct a risk check to the employees and tell them to keep an eye on their family members as well.
Things you should know to minimize business losses and disruptions:
- Ensure that your franchisors and corporate managers are updated with the impacts and effects of Coronavirus.
- Make sure that the employees are regular with their hygiene practices. Try to impose intensified cleaning protocols.
- Always be ready with a plan B for alternative supply sources.
- Check the employee travel list at regular intervals, at least to reach a safe zone.
- Be aware of the crisis management plans, along with emergency communication plans.
- Advice for emergency response and medical consultation should be ensured.
- Keep ties with local healthcare facilities and insurers.
As COVID-19 has invoked a state of havoc globally, long-term business plans will remain unaffected in terms of their consumer demand, supply chain, and franchisees.
Contrary to this, franchise networks like the hospitality and retail sectors will be a massive risk, with those who sell commodities made in China.
Consumer demand will also be affected severely. So it has been a high time for the franchisees to look for strong leadership and ready-made solutions. The franchisees must always have a strategy of how to deal with the impacts of Coronavirus.