As with all businesses, franchise systems are dealing with challenges from COVID-19 that are new and unexpected. Franchisors and franchisees will have to work together, communicate and support each other to overcome these challenges and allow their brands to survive and thrive in the future. Below are some key considerations for both franchisors and franchisees as they move forward into uncharted territory.

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Companies directly and indirectly regulated by the U.S. Food and Drug Administration (FDA) face specific challenges separate from other businesses in dealing with the recent outbreak of coronavirus disease 2019 (COVID-19).  At the time of this writing, FDA has not offered specific recommendations on measures that regulated industries should take.  However, good manufacturing practice (“GMP”) requirements and the Federal Food, Drug and Cosmetic Act (“FDCA”) impose obligations on regulated industry to monitor and control employee health and sanitation practices as they relate to product quality and safety.  Beyond the risk of state and federal enforcement, there are reputational risks associated with inadequate management of COVID-19.

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