Get All Access for $5/mo

'Unpredictability in Various Forms' — How Franchisees Can Adapt and Protect Themselves From Election Year Uncertainty Franchising can be both exciting and challenging, especially during times of unpredictability — like a U.S. presidential election year.

By Jeff Brazier Edited by Carl Stoffers

Key Takeaways

  • Franchise owners must identify key areas that could be affected by policy changes or economic shifts.
  • Franchisees should develop multiple scenarios based on different election outcomes to strategize effectively.
  • Keeping up with political developments, economic forecasts, and industry trends is crucial.

Opinions expressed by Entrepreneur contributors are their own.

During an election year, uncertainty looms large. Franchisees may face unpredictability in various forms, including changes in regulations, shifts in consumer behavior and fluctuations in the economy. A change in administration can bring about policy reforms that directly impact businesses, such as alterations in tax laws, labor regulations and healthcare policies. Additionally, broader economic factors influenced by election outcomes can trickle down to affect consumer spending habits and market dynamics.

While franchisees should be conscious of these potential side effects, proper planning and communication can mitigate risk and help franchisees ensure a well-run operation and smooth transition regardless of the environment pre-election or any changes that come after. For example, Kiddie Academy, where I'm chief development officer, has prospered through many presidential terms. The key to this persistent success is awareness and preparation. The following tips will help you achieve both as you guide your business through the unknown.

Related: Considering franchise ownership? Get started now to find your personalized list of franchises that match your lifestyle, interests and budget.

Assess potential impact areas

The first step for franchisees is to assess potential impact areas within their business. This involves identifying key aspects that could be affected by policy changes or shifts in the economic landscape. Areas such as taxation, employment regulations, supply chain management and consumer demand should be closely examined to anticipate potential challenges and opportunities.

This may include conducting a comprehensive review of your current tax liabilities or analyzing your supply chain processes to identify any vulnerabilities and explore alternative sourcing options. Additionally, you can stay ahead of changes in consumer demand by surveying your customer base to gauge shifting preferences and tailor offerings accordingly.

Explore the scenarios

To prepare for the fluctuations of an election year, franchisees should develop multiple scenarios based on different election outcomes. By envisioning best-case, worst-case and most likely scenarios, franchise owners can brainstorm strategies for navigating each situation effectively.

Collaborate with political analysts or other reputable sources to gain insight on potential election outcomes and their implications for the business environment. You can also organize scenario planning workshops with key stakeholders to identify potential outcomes and create strategic responses tailored to each. Other helpful measures include stress testing your financial models against the scenarios you develop and establishing communication protocols for any election-related developments.

Related: Find Out Which Brands Have Ranked on the Franchise 500 for Longest, Earning a Spot In our New 'Hall of Fame'

Stay informed and engaged

Amid uncertainty, staying informed and engaged is crucial for franchise owners. Keeping an eye on political developments, economic forecasts and industry trends allows franchisees to make informed decisions and pivot strategies accordingly.

To stay up to date, consider subscribing to daily news digests from reliable sources that provide updates on political developments. Find webinars and workshops centered on exploring the potential impacts of political and economic factors on the franchise industry. If you're able to, establish an advisory board of industry experts, economists and legal professionals that can provide strategic guidance and advice in a fluctuating environment.

Remember to lean on your circle of professional affiliations to help guide policy that is beneficial to a thriving and growing economy; this could be the International Franchise Association, your local chamber of commerce, industry-specific organizations or other support groups.

Maintain financial resilience

Financial resilience is key to weathering the turbulence of an election year. Franchise owners should strive to maintain a healthy cash flow, build up reserves and minimize debt wherever possible.

If possible, diversify revenue streams and implement cost-saving measures to help mitigate financial risks and ensure sustainability in the face of economic fluctuations. Conduct regular cash flow analyses to optimize income and expenses, establish an emergency fund to cushion against unexpected downturns and explore financing options to supplement cash reserves. Additionally, cost-saving measures like renegotiating contracts with suppliers and optimizing inventory management can help bolster your financial stability.

Related: One State's Bipartisan Bill Will Change the Franchise Industry — And Boost Responsible Franchising

Embrace innovation

In an unpredictable environment, innovation becomes a competitive advantage. Franchisees should embrace innovation across all aspects of their business, from product development and marketing strategies to operational efficiency and customer engagement.

Consider conducting market research to understand shifting consumer behaviors and inform strategic decisions regarding product offerings, marketing strategies and customer engagement tactics. Additionally, embracing digital transformation is crucial when adapting to fluctuating consumer behaviors–this could include upgrading technology infrastructure, developing mobile apps or online platforms and leveraging data analytics for personalized marketing and customer insights.

Prioritize the customer experience

Prioritizing customer experience is always paramount to success, but this is especially true when operating in an unstable environment. By placing the customer at the center of operations, franchisees can foster loyalty, drive repeat business and differentiate themselves in a competitive market.

Focus on delivering exceptional service, building strong relationships with customers and soliciting feedback to continuously improve your business's offerings. This might include tailoring customer interactions with increased personalization; investing in improved communication channels such as email newsletters, social media and mobile apps; or, lastly, establishing mechanisms for collecting and analyzing customer feedback, like surveys and reviews.

Related: McDonald's Dives Into Anime Craze — And Flips Its Golden Arches— with WcDonald's Event

Reframe challenges as opportunities

While navigating an election year can pose challenges for franchise owners, it also presents opportunities for growth and innovation. A shift in environmental regulations could mean you have the opportunity to build more efficient buildings, or an increase in wages could offer the chance to use technology to create efficiencies. Additionally, when others pull back, use this as motivation to push forward and take advantage of opportunities that were previously limited due to competition.

Franchisees must continuously monitor the evolving landscape and be prepared to adapt their strategies accordingly. Flexibility, agility and a willingness to pivot are essential qualities for navigating instability and positioning a franchise for long-term success.

By adhering to these six tips, franchisees will be well-positioned regardless of whatever election-year changes come their way.

Jeff Brazier

Entrepreneur Leadership Network® Contributor

Chief Development Officer

Jeff Brazier is the chief development officer at Kiddie Academy, leading all development activities including franchise development, finance, real estate and construction. He became a member of the Kiddie Academy team in 2016 and has over 15 years of business development and marketing experience.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Fundraising

Working Remote? These Are the Biggest Dos and Don'ts of Video Conferencing

As more and more businesses go remote, these are ways to be more effective and efficient on conference calls.

Growing a Business

The Best Way to Run a Business Meeting

All too often, meetings run longer than they should and fail to keep attendees engaged. Here's how to run a meeting the right way.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Devices

Stay Focused with These JBL Headphones for $25

These on-ear headphones support Siri and Hey Google along with hands-free calls.

Devices

Save $20 on This Fast-Charging, Portable Power Bank

Quick charge your devices with a single power bank that goes with you everywhere.

Innovation

The Key to Real Innovation Is Cross-Pollination — Here Are 10 Ways to Implement It in Your Business

Transform your business with this unique approach to sparking innovation.