The Pro Camp
Why grads are awesome candidates
Over the next 15 years, the largest generation in history – the Millennials – will continue graduating from varsity, looking for new and interesting opportunities to launch their careers.
Millennials want to make their mark on the world, pursue their entrepreneurial interests, establish their independence and enjoy a comfortable lifestyle, which means franchising might be their ideal match. Here’s why.
1. The basic premise of the franchise model is optimal for young people
Owning a franchise allows you to go into business for yourself but not by yourself. For young people who crave independence but require extra TLC when learning the ropes, franchising offers a great mix of both. Millennials adapt well to proven systems, structure and oversight.
Younger owners eager to embrace new opportunities often devour franchisee manuals, contracts and training materials.
What’s more, younger franchisees are far more malleable than the typical franchisee candidate, who may have decades of experience but needs to be retrained in a whole new style of doing business.
2. They’ve grown up with franchising
Young people today have grown up using and relying on products and services provided by franchises. Many have even worked for a franchise company.
In this way, many young franchisees can build on experience they gained as franchise employees. And as any franchisor will tell you, those with previous experience and a passion to take on the responsibility of ownership often make some of the best owners.
3. Entrepreneurship is in their blood
It’s not uncommon for twentysomethings to have a few small businesses already under their belts, and that means they’re earning experience, credit, cash and other valuable resources that can prime them to be more successful franchisees.
Others who’ve yet to launch their own ventures are thinking about it and aggressively preparing themselves to do so. What’s more, business and entrepreneurship classes are popular and on the rise.
4. Parents offer family support
Parents often take an active role in supporting their kids’ entrepreneurial quest and many are open to financing, co-signing the necessary loans, or assisting as much as they can.
This isn’t to say young recipients of assistance don’t have any skin in the game. Anyone who has ever borrowed money or had others invest in them knows that the pressure that comes along with it, whether direct or implied, can be just as intense as if their own money was at stake.
5. They think big
Today, everything is supersized, including young people’s dreams and aspirations. Millennials are inventors, leaders and even broadcasters at a young age.
They create videos that can be seen by millions, they start non-profits that affect the lives of thousands in foreign countries, they launch companies from their dorm rooms that sell for hundreds of millions. This level of ambition has caused many franchisors to start looking at young people not only as the next great wave of franchisees, but also as the best new prospects for multi-unit ownership.
Young people today bring a lot to the table as franchisees. Not every recent grad will make a good candidate though, just as not every older candidate will. It is, however, about time that the franchise community and young people start to recognise how good they are for one another.
The Con Camp
Young franchisees have too much to learn
Many franchises have experimented with this development strategy at one time or another. The most common approach is for the new grad to operate the franchise while the parents put up the funds. Though there have certainly been success stories, they are few, and the problems that arise for franchisors are plentiful.
A two-fold challenge
First, most recent varisty graduates don’t have the financial resources to fund a franchise start-up, so someone else has to put up the money for the new business. Second, many lack the life experience and motivation necessary to run a business effectively and stick with it when times get tough.
Any start-up will occasionally run into problems that involve long hours or missed paycheques for the owner, in addition to the stress that comes with being the boss.
Franchisors and parents have learnt the hard way that when the going gets tough, someone with no skin in the game is more likely to bail on the business and find a job with a dependable source of income.
This course of action can leave the silent partners with their entire investment at high risk and the franchisor with an abandoned unit.
The age issue
Most franchise systems are set up with the expectation that franchisees will have a fair amount of practical management and life experience they can draw from when running the business. But most recent college graduates have very little, if any, practical experience recruiting, retaining and managing employees. This disconnect can cause a number of problems because it’s often one of the most important elements of running a franchise successfully.
Many of us can recall dozens of mistakes we made when first gaining experience in management.
It doesn’t take a stretch of the imagination to assume that most recent college graduates are going to make many mistakes in an environment that can be quite unforgiving, depending on the industry. Starting a franchise is difficult enough without the added risk of inexperience.
The right stuff
There are certainly exceptions to the generalisations made here. If a recent graduate has been demonstrating certain business-like habits for years, they might be a great candidate for owning a franchise. One such habit is saving money and investing it wisely.
Even if the amounts aren’t impressive, this shows a fiscal conservatism that’s rare in young people today. Another good indicator is an early passion for or participation in entrepreneurial activities. Prospects should also have lots of leadership experience – accomplishing tasks that required effort from others that they directed.
The best advice for recent varsity graduates interested in starting their own franchises is to find a job, gain practical experience in the work force and save money. In a few years, they’ll be in a much better position to take advantage of the benefits that can come from owning a franchise.