How franchising can help fill empty retail sites

By Jon Sully | 08 Jul 2020 View comments

As businesses return following COVID-19 shutdowns, Melbourne faces new lockdown challenges. Even without this latest development most franchisors are paralysed, with little extra funds for development teams or marketing money to find potential franchisees.

However, franchises offer a significant potential for major landlords to fill their vacancies.

Landlords are investigating options to promote the franchising industry as they are acutely aware success in filling vacancies will come from activating the bricks and mortar retail franchise network.

To support franchise networks, some landlords are setting up funds to lend money to potential franchisees to start their businesses. This is important in the current climate where banks are cautious about lending to franchises.

Landlords are helping to tackle this problem, particularly in regional locations where the value of their houses in small towns will not provide enough equity to borrow against. Potential franchisees may need to go outside traditional lending options in order to start their businesses, and these landlord funds are one such option.

Focusing now on the post-lockdown phase, we believe it will take significant time to rebuild the retail industry. At this stage, predicting the ‘new normal’ is difficult as we believe it will be dependent upon the landlords’ ability to navigate their way through the survival phase to retain as many retailers as possible.

Unemployment rates in Australia are the highest in 19 years, with the Australian Bureau of Statistics (ABS) reporting that the unemployment rate increased 0.7 pts to 7.1 per cent in May.

At the same time, second wave COVID-19 fears are spooking global markets and economies – slowing the move back to normality or the ‘new normal’.

Given these circumstances, we anticipate that there will be unprecedented growth in the franchise industry over the next three years out of pure need to generate income for many households around Australia and indeed the world.