Reopening
The Complex Reality of Reopening Written By JOHN TEZA
As the first states begin to relax social distancing measures and allow stay-at home mandates to expire, managing a retail, consumer, or franchise business is about to get very, very complicated.
T
he Covid-19 healthcare crisis and the Great Shutdown have been difficult and incredibly disruptive for retail businesses across the spectrum of every industry, category, and size. With few exceptions, essential businesses have been running on significant reductions in revenue. Operators of essential businesses have had to be nimble and creative in tailoring their operating environments to new standards of social interaction virtually overnight. They have had to be mindful of team member and consumer fears regarding virus contraction. And they were the lucky ones. Many more businesses were deemed non-essential, thereby forcing their closure in states with stay-at-home mandates. However, as difficult as the business environment has been, decisions regarding mode of operations have been relatively simple, as the logic behind the mandates has been fairly consistent. That is about to change significantly. BUT FIRST, ESSENTIAL VS. NON-ESSENTIAL Through the early stages of the Shutdown, most states considered a binary outcome relative to the question of continuous operations: essential or non-essential. For businesses deemed non-essential, there was no decision. Based on jurisdictional mandate, these businesses were forced to close for the duration of each state’s stay-at-home provision (or in some cases, until state leaders amended the original guidance.) For businesses deemed essential, only those willing to adhere to specific modes of operation – for example, take-out only in restaurants or BOPIS (buy online, pickup in store) only for retail) – were allowed to operate. For the most part, these provisions were fairly consistent from state to state, with a few notable exceptions. Personal services, entertainment, fitness, shopping, gaming, sporting venues, and industrial manufacturing were deemed non-essential and were closed. Healthcare, restaurants, grocery stores, liquor stores, pharmacies, banks, distribution, home improvement, and home services were considered essential, and a general coalescence around a “safe mode” of operations was determined, typically by category. For those businesses in limbo (transportation, daycare, education), market demand largely dictated that although they fell into
the latter category, for the most part, they were to operate like the former. The Great Lockdown unfolded in a fairly uniform manner, at least from the perspective of which business categories were allowed to operate, and how. THE GRAND REOPENING This uniformity will change this week as the first states begin to relax social distancing measures and the first stay-at-home mandates begin to expire. Business owners, management teams, and franchise operators are now required to manage multiple sets of interrelated and often unrelated variables in deciding how to best determine the most appropriate (and legal) mode of operations – and how to counsel their franchise operators to do the same. The first set of variables is related to allowable use: 1. State or jurisdictional mandate. As each state comes on line, it will set specific timetables for various stages of reopening. Some states will tie these stages to objective measures like infection rate decline, while others will be less prescriptive. Organizational awareness of each state’s specific time frame, and the manner in which it will unfold, will be paramount. In addition to the state level, companies will need to be mindful of additional provisions set forth by lower-level jurisdictional mandates, be they city, county, or local interpretations. 2. Business category. This should conceptually be static within an organization, as a restaurant is a restaurant and a salon is a salon. However, the impact of asymmetrical application of state mandates across sub-state jurisdictions will require companies to be incredibly mindful of what is deemed to be operationally compliant for their use, on a jurisdiction-by-jurisdiction basis. Trade associations, such as the National Restaurant Association, the National Retail Federation, and the IFA have released proposed guidelines for post-Covid best practices, which is incredibly helpful. However, every state will assess each business category through its own lens and will create a safe standard of operation unique to its jurisdiction. For example, Texas has deemed a maximum of 25% pre-Covid occupancy for restaurants, where the state of Georgia has imposed no such standard.
FRANCHISEUpdate
ISSUE 2, 2020
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