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How COVID-19 is Affecting Franchise Law

The current environment in societies around the world is being affected by the COVID-19. These effects have to do with how individuals are living their daily lives and also how businesses are operating. Included in this category are franchises and their operators that have to readjust their focuses. Franchise laws are expected to continue to change to protect not simply franchises but the greater community, as well.

Franchise law actually refers to the entire body of the laws that apply to the operation of franchises. This type of law practice involves the process of making franchises, operating franchises, and ending franchises. According to Legal Career Path, this segment of the law encompasses regulations, as well as, laws at all levels of government. Lawyers in this field assist their clients by representing them with proficiency with these laws.

In some instances, clients need lawyers to highlight and explain the law and to ensure thorough compliance with them. Covid-19 has made it essential that businesses in this category not only protect their workers but their customers. In some cases, it is important to direct actions to meet these laws’ parameters. Being advocates in this field is critical at this time because franchises are expected to maintain and follow government directives the same way that citizens are.

Every single type of business has to deal with the new normal, including those that are franchises. These are generally defined as businesses that are legally allowed to use another company’s secrets, business identifiers, and copyrights. The franchiser offers the use of these for an agreed-upon fee, and the franchisee is responsible for operating the business and paying the fee. Although many around the country have closed their doors, they still must be concerned with their operating agreements.

Operating Essential Businesses

Each state is responsible for determining how businesses are operating on a daily basis. Essential businesses, such as those related to grocery supplies, banking, and medical facilities are operating. Franchises that fit in this category are expected to comply with CDC and government mandates for social distancing. Some sources say that staying abreast of Franchise Advisory Council objectives is paramount for all businesses. Your lawyer will be able to connect you with council information.

Reporting Pandemic Effects

Individual franchises, in most instances, are expected to report the effects of the pandemic on their operations. Councils are responsible for obtaining and relaying this information so that franchisors are able to make the best financial decisions. Here are some of the things that should be reported:

* Declining Sales

* Declining Relations

* Supply Chain Disruptions

* Staffing Problems

The Coronavirus has caused many of these franchisors to make difficult decisions because of current economic challenges. Lawyers in this field are valuable resources to utilize prior to making decisions.

Operating Online Franchises

There are franchises that have strong online operations that may continue during the pandemic. Those that rely specifically on the sale of products have other challenges to consider. Shipping and delivery through third-party companies is a concern. It is possible to carve out a niche currently as long as franchisees are able to accommodate orders. Most businesses in this arena are seeing fewer sales, so reducing staffing is necessary. The goal here is to do as much online as is possible for your model, which may involve consulting with an attorney that specializes in this area.

Operating International Franchises

If you happen to own a franchise that has international business appeal, it is important to know how the pandemic is impacting your industry. The International Franchise Association is one resource that can be used for this purpose. There is written and video content here that highlights the changes in affected franchise operations. In some cases, these are franchises that are owned by parent companies in different countries. Understanding the laws in this regard is critical both now and in the future.

The executive and congressional branches have provided businesses and consumers with financial assistance due to the global pandemic. In some instances, these loans and funds will allow business owners to remain operational. Others will be able to utilize these resources in order to change their business models as franchisers. Flexibility and the ability to readjust are essential during these times and your lawyer is the best person to consult about these changes.