Has COVID Pandemic Destroyed the Franchise Industry?

Has COVID Pandemic Destroyed the Franchise Industry | Franchise Coach

Since the pandemic started in March 2020, it has brought on an economic downturn in the US and worldwide. Many lost their jobs because some businesses were closed, while others shifted to the work-from-home setup.

In fact, the unemployment rate has spiked to 13.1%, the highest rate in 80 years. According to the US Department of Labor, 42 million people have filed unemployment claims since mid-March.

With the unemployment rate surging, many believe that now is not a good time to start a business. But historically, recessions have been great times for savvy investors and aspiring business owners to invest in franchise businesses.

On this account, has the COVID-19 pandemic has destroyed the franchise industry or strengthened it? In franchising, you don’t buy a business for now because you buy it for the future.

Running a successful business is all about planning ahead and then executing on that plan. So even pandemic strikes, many franchisees continue to invest in franchises.

Franchising Continue To Strive in the Market In 3 Ways

1. Franchisors Offering Incentives

While franchisors may be running a business, as usual, they know that many new franchise candidates are afraid to start a business during a pandemic crisis. One way to face this issue is by offering incentives to new franchisees. 

Mostly, franchise incentives can be in the form of:

a discounted franchise fee
low marketing expense contribution
zero down payments
or other conversion programs

Because of the uncertainty in the economy, many think that this is a terrible time to start a business. I disagree. Acclaimed economist Benjamin Graham said to “buy when most people, including experts, are pessimistic and sell when they are actively optimistic.”

2. Expanded In A Virtual Setup

Has COVID Pandemic Destroyed the Franchise Industry? (Expanded In A Virtual Setup) | Franchise Coach

Adjusting to the new tradition since the pandemic started is important to survive the business. In franchise businesses, training and annual meetings are held virtually to update existing franchise owners to the current state of the company. 

Many of the new franchisees responded well to the live training. In fact, they can conveniently attend at home, no need to travel.

Furthermore, almost every franchisor has continued to sell franchises. For a while, they substituted in-person discovery days with “virtual” discovery days via zoom.   

3. Many Take Franchising as an Advantage

The pandemic has encouraged more people to explore starting their own franchise business. There are now 42 million unemployed people. 

Many are considering starting their own business to have greater control over their lives. In addition, the fact that we’re all in lockdown means that people have all the time they need to research new business opportunities and plan for their futures.

In these uncertain times, it’s easy to get paralyzed with fear. However, if you remain fearful, you don’t take advantage of opportunities.

It’s ironic that the same things that are scaring potential investors are also great advantages to starting a new business now. 

For example, a high unemployment rate means that businesses have a massive labor pool to draft high-quality candidates from. With businesses closing and people losing their jobs, more prime commercial real estate will become available at low rents. If you invest now, you will be in a great position after the economy recovers.


The pandemic has created an opportunity to invest in the right franchise. Unlike previous recessions, financing remains plentiful and available. You still need to do your own due diligence to make sure that the franchise is the right opportunity for you.

The last few months have been hard. The pandemic will end and the world will return to normal. We have no idea when it will end. Until then, we should focus on the positive, including new business opportunities. Let’s take advantage of these opportunities.

Bonus Read: “Michael Schonberg from The Benetrends – Expert in Franchise Finance”


I use my skills and experience to guide you from the beginning to the end of the franchise investing process