Level 4 lockdown, challenges facing businesses opening

doors-open

As South Africa grappled with the partial lifting of restrictions under Level 4, franchise members have been contacting the association with many questions that have come out as a result of the regulations with many things up in the air in terms of the exact requirements needed to open. Franchisors are busy strategizing whether it will pay them to open and balance the potential income to the costs of operating. Many wanting clarity on the following:

  • Does a business need to get a permit to open under Level 4?
  • Do all staff members also have to have a permit and what percentage of staff is allowed back to work.
  • If the curfew starts at 8pm in the evening, many businesses will need to close orders earlier as they will need to do the necessary clean-up and sanitizing and allowing staff time to get home before lockdown.
  • If businesses can only have one third of their employees on duty does this exclude their drivers… if it does it means they won’t have enough staff or enough drivers.
  • What safety procedures must they follow – in terms of PPE.
  • What is the criteria to determine which employees can return to work, if only a part of the workforce is allowed to return.
  • What kind of travel permits and proof of employment are employees expected to carry?
  • What if a business can’t open because its value chain is not operating?
  • Will staff be tested before they return to work, on a regular basis while at work and what are the processes should staff get infected.

In the food sector, which was allowed to open for deliveries on the 1st May, whilst many have jumped at the chance to re-start their businesses, others have indicated on public platforms that they would not open until they had done proper due diligence on the impact of opening under punitive restrictions.

Some, like Col’Cacchio and Doppio Zero say it is dependent on individual franchise owners in specific areas who have the necessary delivery mechanisms in place – given that Uber Eats and Mr D only deliver in certain areas (and have very high delivery charges) and they will need time to set up their own delivery mechanisms.

Many franchisors in the fast food arena are welcoming the opportunity to open for deliveries and will do everything to make sure they put in place all the necessary safety protocols to protect their staff and their customers. Many restaurants, who rely on sit-down, will try that option but there are others, like Spur, Tashas & Ocean Basket who have said that it may not be worth their while as their experience with social distancing before the lockdown showed that reducing the numbers of covers due to spacing did not make business sense.

FASA spoke to a few franchises – below are the responses from some of our members:

Roman’s Pizza will open select stores from Friday with a Limited menu and will be making use of Uber Eats and Mr. D where these third party delivery partners operate which only collectively covers around 130 of our stores. “We are looking into “own” delivery wherever possible but face challenges which include recruiting drivers and sourcing bikes and then of course registration and licencing,” says Bonnie Cooper, CEO of Roman’s Pizza. “Due to time constraints, we will have to stagger the opening of stores as we also have the challenge of deliveries from our DC’s and we can only open for distribution on Friday, 01 May. We also need to ensure that every single store that opens, complies with the social distancing regulations as well as Covid 19 regulations. Landlords pose a problem and we need rental reductions to ensure the profitability of our stores…. It’s been difficult but will hopefully be rewarding.”

Holding company Chip n Dip Holdings (Pty) Ltd which has a number of brands (Chip n Dip, Hot Dippety-Dog, Chip Twister, Dancing Doughnut Factory & Doughnut Pops) has around 90 franchisees who among them own 260 units across all brands. According to Gerald Brown, Director of Chip n Dip Holdings, their fast food offerings are unique in that very few of their Franchisees are in Shopping Malls and Fixed locations but operate largely in the eventing space. “Our products are more of an impulse purchase and would not fit into a delivery model,” says Brown. “Currently none of our Franchisees can open as all gatherings have been prohibited. So until such time as this is lifted or relaxed we will not be able to trade. The earliest we can expect any of our Franchisee’s to start trading is when the Hotels and Resort companies start opening and, where we are on the premises, we will be hopefully be allowed to trade. The earliest expectation for this will only be at the end of June.  As a Brand, we do not for see us returning to any form of normality until the end of the year. This will severely impact on the Franchise as well as the Franchisee’s in our system. With no income coming in it will be difficult for any of them to keep their heads above water with these restrictions.”

According to Jayde Moita, Senior Legal Advisor, Pizza Hut is well underway in planning for opening selected outlets with Delivery in accordance with the Government parameters and directives for Level 4. “The complexities around delivery are only one of many aspects which need to be considered and addressed in the current circumstances and in an opening of this nature. Ultimately customer safety and that of our team members are paramount and without question, the most important factors.”

Besides ensuring the quality of our Pizzas, more importantly, we need to ensure that our restaurants are stringently deep cleaned and sanitized ready for opening; our instore procedures and international best practices are implemented; that our products are safe and only the freshest ingredients used; our team members are COVID 19 trained and our low contact delivery procedures are in place and adhered to, to ensure not only our customers safety, but the safety of our team members, who will be out there, serving our communities.”
“We are working with our dedicated franchisee partners and team members to ensure we are ready with exceptional, fresh products, safely prepared and delivered safely to customers through the Pizza Hut delivery system and through partners like Uber Eats and Mr. D.

Spur posted this on their corporate website. “Each one of our restaurants is independently owned and operated under franchise. It is important to note that as our restaurants are largely sit-down and the overhead structures associated with this business model are significant (measurably more than a quick service restaurant) opening the doors for trade is not an inexpensive exercise and therefore it is incumbent that we and our franchisees are certain that the trade generated will at the very least cover the costs of opening. It is critical that opening for deliveries only is commercially viable. We would like to reassure our patrons that, their safety, health and wellbeing of all is our priority, and we continue to take every precaution across all our restaurants to ensure the safety of our patrons and staff. We have implemented the promotion of WHO and SA health authorities best practice guidelines to all staff and our franchisees.”

FASA Franchise Association South Africa
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