The best performing franchises through the Covid-19 crisis.

The Best Performing Franchises In The Covid 19 Crisis 780X660

A recent survey conducted by FRANdata Australia, gave insights into the performance of franchise brands and the broader sector through the covid-19 crisis so far.

Combined, the respondents to the survey represented over 11,000 franchise units in the Australian marketplace, from 55 franchise brands.

Not all performance indicators are equal

Like the rest of the economy, franchise brands are affected differently depending on the niche they service. Also, in my personal discussion with many franchise brands, I have found a number of instances in niches in the economy that are performing well, that there are still a number of franchise owners within them, not doing as well. 

This can be for a range of factors including, but not limited to: location, product mix, and their business performance status prior to the crisis.

Unit sales for March 2020 compared to February 2020

The survey showed that comparing revenues from March to February 2020, that 80% of brands expected a reduction in revenue as detailed below;

  • 28% anticipate 50-100% revenue drop,
  • 30% anticipate 25-50% revenue drop,
  • 22% anticipate 1-25% revenue drop, and
  • 20% anticipate an increase in revenue.
Average Unit Revenue Changes Frandata With Franchise Buyer

Expectations for the next 90 days April to June 2020

The survey shows that 74.5% of all respondents expected weaker trading conditions for the 90 day period of April through June. The breakdown of this is detailed below;

  • 58.8% expect a significant revenue drop,
  • 15.7% expect a moderate revenue drop,
  • 13.7% expect conditions to remain about the same revenue,
  • 11.8% expect improved trading conditions.
Revenue Expectations Over Next 90 Days Frandata On Franchise Buyer

Best performing franchises

The franchises where the sales performance reporting indicates them to be the most resilient through the covid-19 crisis are in the following industries;

  • Pet related services - Contactless services, for example, mobile dog grooming brands with people at home with pets, and the ease of social distancing in this instance.
  • Maintenance services - Contactless services, for example, yard services, regular servicing of pools, electrical safety. Also, extra time home is seeing home maintenance and repairs likely dovetailing with work being done with other work around the house. Some maintenance work is also being undertaken as schools and facilities being closed, has given an opportunity to do work that otherwise needed to be time-managed with attendance. 
  • Health services - this one is clearer with in-home nursing support, assisted living and the like. The crisis appears to have given an impetus by many to commence or increase their utilisation of these services.

Worst performing franchises

The survey indicates that franchises within the following sectors have been less resilient during this crisis. For even many casual observers, the list below would come as little surprise, given they are generally those required to close;

  • Retail stores - particularly those with major shopping centre location focus with crowds being avoided indefinitely.
  • Restaurants (sit down) - again, major shopping centre located with sit down focus as well, is a double-hit, with your ‘local’ likely finding it much easier to engage with their community and then implement home delivery close-by.
  • Fitness clubs - again, fully at the mercy of shut downs and people gathering limits.

Of course, the hope is that with the removal of some of the restrictive conditions over recent days in many states, that it will provide room for many franchise owners, and others in the economy, to safely commence trading, and a path to recovery.