The COVID-19 Crisis and Franchisors

Summary

This practice note examines the consequences of the coronavirus pandemic on franchises and looks at how the crisis has affected both franchisors and franchisees. In particular, it discusses what franchisors should be considering during this time and the changes they should be making to their systems. Finally, the practice note provides some of the tools that are available to the franchisor and franchisees to restructure and get ready for the turnaround including informal settlements with suppliers; negotiations with customers to settle/defer accounts; robust and fully integrated financial modelling to determine cash flow requirements; and formal proposals to creditors.