How does the COVID-19 pandemic affect franchises systems?
On March 11, 2020, the World Health Organization declared
COVID-19 a global pandemic. As the situation evolves, the
day-to-day affairs of businesses are constantly changing.
Responding to a pandemic poses a unique situation for franchise
systems, which are comprised of many independent businesses
operating under a common brand. In order to protect that brand, it
is incumbent upon parties to the franchise relationship to take
decisive action to address the current pandemic throughout the
system.
At a minimum, franchisors likely need to consider a response to
the COVID-19 pandemic at two levels: their head office operations
and in their unit franchises. Franchisors that have other aspects
to their operations – such as company-owned units or that act
as manufacturers or suppliers – may have additional levels or
concerns. In addition to following the policies or practices
implemented by the franchisors,
