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Attention management teams: what's beyond the recession?

Article Excerpt
What will recent economic events mean in the long term? AlphaGraphics senior direct of franchise development posed that and other questions to several franchise leaders: Tasti D-Lite Chairman and CEO James H. Amos, CFE; The Dwyer Group President and COO Mike Bidwell, CFE; Edible Arrangements President and CEO Tariq Farid; Management 2000 Founder & President Bob Gappa, CFE; and Dunkin' Brands Vice Pres. of Franchising Lynette McKee, CFE.

Most franchise executives know too well the pains of recent events with the economy. For many brands across the country management teams are realizing reduced leads for development, challenges with financing, franchisees struggling at the unit level, royalty revenues down, accounts receivables climbing, and layoffs possibly required. With so much to juggle right now, the thought of what the current economic climate could mean three to five years down the road isn't even on the radar. So we thought we would look into it for you.

What are your initial thoughts on the state of the current economic events in relation to franchising?

Farid: Franchising has always prided itself with growth in a downturn economy. I don't think we can say that this time. Everyone has to pause and focus within. If addressed properly, this downturn could be very beneficial. Things will turn around. The question is who will still be standing and have a better system ready to explode with growth?

McKee: The challenges today are working in favor for new franchisees coming in. It's because management teams must be more disciplined than ever. Challenges that may have been ignored in the past can't go on being ignored. If leadership has not been paying attention to details of unit economics, they better start now.

Bidwell: Unlike any other time in history, the marketplace continues to change at an ever increasing pace. We have to be mindful of that. The brand has to continue to evolve to stay relevant in the end customer's eyes. The market place is efficient and dynamic. And that means it can be cruel and painful. For those brands that have not been staying relevant...

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