The COVID-19 pandemic is affecting almost every business in one
way or another. This is equally true for franchise systems and the
franchised businesses in those systems.
A limited number of fortunate franchise systems and business are
experiencing a positive impact, as the pandemic increases the
demand for their goods and service. However, most systems and
businesses are experiencing a negative impact as they cope with
realities such as decreased revenue, mandatory or voluntary
closures, and adapting to new ways of delivering their goods and
services.
Whether the impact COVID-19 is having on a franchise system is
positive or negative, there are likely disclosure implications for
franchisors. For example, the impact of COVID-19 on a franchise
system may have an effect on some of the prescribed disclosure
items under franchise disclosure laws.[1] Additionally,
the impact, and how the system is responding, may be a
"material fact" under those franchise
