Franchisors Waive Fees During COVID-19 Pandemic

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Franchisors Waive Fees During COVID-19 Pandemic

03/26/2020

Franchisors are helping their franchisees, offering them financial relief during the COVID-19 crisis.

Fazoli’s, the fast-casual Italian brand, is among the brands giving its franchisees royalty and ad fund relief during the COVID-19 crisis.

'We Can Get Through This Together'

The company sent communication to franchisees outlining the emergency measures in response to the ongoing developments and expansion of the Coronavirus. The plan includes waiving royalties for March with repayment over a 10-month period. It also will suspend monthly marketing fees and includes local marketing strategies that emphasize off-premise channels, focusing on drive-thru, delivery and carry-out messaging.

“At Fazoli’s, we are all in this together and supporting our franchisees is one of our top priorities,” said Carl Howard, CEO of Fazoli’s. “While the restaurant industry is dealing with this rapidly changing landscape, we know we can get through this together. We are being smart and very proactive to make sure we all emerge from this challenge stronger than ever.”

 

Barberitos is suspending fees for franchisees and launching new to-go meals to help its business owners.

In light of the COVID-19 outbreak, Barberitos has launched several initiatives for its franchisees to provide financial relief and to assist in keeping their locations open and safe. The fast-casual southwestern grill has 50 locations across the Southeast.

“The Barberitos franchisees are my extended family, and we are in this together,” said Downing Barber, Barberitos Founder & CEO. “I have spent most of my life serving food and am committed to continuing to do so in the safest manner possible.”

As the COVID-19 virus pandemic has progressed, Barberitos Franchising Inc. (BFI) has taken numerous actions to support their franchisees during this time. including removing royalties and marketing fund contributions beginning March 16. BFI has extended terms on national deals for immediate relief, as well as providing recommendations on how to negotiate rent and other expenses. The franchisor is working with its business owners working with franchisees to ensure they take advantage of government support opportunities such as SBA Disaster Loan Program. It is also offering a sounding board for best practices, as well as the development and promotion of new menu items, hours, delivery, curbside pickup, etc.

QDOBA too is offering relief to its 380+ small business owners. The franchisor is also postponing weekly royalty payments for eight weeks in response to COVID-19. The move will enable QDOBA franchisees to protect cash flow where restaurants are adhering to the CDC guidelines for social distancing and the U.S. government’s mandate for dining room closures. QDOBA says it is looking out for its franchise owners across North America and is taking the necessary precautions to keep both the community and its people safe, while also moving business forward.

“QDOBA understands the plight of our franchisees during these unprecedented times, and we are committed to supporting our local business owners in any way we can,” said Keith Guilbault, CEO of QDOBA Mexican Eats. “Our focus with every decision is to be in the best position possible to address this downturn and continue to be a dependable choice for our guests.”

Responding rapidly to the market conditions, QDOBA has begun hosting daily webinars with its franchisees to keep lines of communication open. The company has also moved to limited-contact ordering, including digital ordering through QDOBA.com or the QDOBA app, in-restaurant to-go ordering, and delivery via its third-party providers in response to the current environment.

Yum! Brands too has stepped up to help its owner-operators. To help them manage through a this unprecedented period, Yum! established a Global Franchise Health and COVID-19 Support Team to help KFC, Pizza Hut, Taco Bell and The Habit Burger Grill franchisees navigate business continuity.

In the U.S and internationally, the company is working with franchisees who need access to more capital and are in good standing to provide assistance, including grace periods for certain near-term payments where necessary. In the U.S., the company is also allowing franchisees to defer all 2020 capital obligations for remodels and new unit development through the end of the year.