originally posted on Franchising Today Magazine
When you picture a typical franchisee, you probably conjure the image of an established professional looking to break out of their corporate gig or a baby boomer staging a second act to create additional income as they approach retirement. For decades, these types of people, along with other individuals with the net worth to invest in their own business, were the ideal candidates to buy into a franchised system, but that’s started to change in recent years.
Partly due to a difficult job market, many millennials are looking to transition from overworked entry-level employees to managers and business owners more quickly than previous generations. Because of this, millennials are increasingly becoming a major part of franchised systems. For a variety of good reasons, this trend is likely to continue.
Millennials enter the workforce with a variety of skills, but don’t necessarily have experience in many of the areas of expertise required to head a traditional business. Becoming a franchisee in an established franchise system comes with an already-proven system that helps fill in many areas of that experience gap. The proven business model of a successful franchise provides a road map that leads franchisees on a successful path. The overall system is only as successful as the many partners who own franchises, so a franchisor is invested in providing training, guidance and support.
Franchisors have the ability to look broadly at their entire systems to find out what practices from their best-performing locations can be applied to others, meaning millennial franchisees benefit from the experience and wisdom of a broad network of successful business owners. Many franchised systems provide easy-to-follow processes for everyday business tasks such as payroll and accounting, supplementing the skills a millennial may lack without many years of business experience.
Instead of being completely on their own, partners in a franchised system have the support of a larger group of people motivated to see them succeed. This allows younger business owners to be adventurous in areas where they think new ideas can benefit the business while relying on tried-and-true practices for other aspects.
Starting a business from scratch can be an incredibly costly endeavor. The costs of overhead and real estate are high for any new business owner, franchised or not. Looking beyond these unavoidable costs that impact most businesses, the costs of researching and developing a new concept and the long runway from startup to generating revenue create a massive financial barrier to clear.
The tried-and-true model of a franchise allows new partners to get up and running more quickly, creating a tempting alternative for a younger generation who may not have the savings required to survive a long gap between when they open and when they’re turning a profit. Additionally, obtaining a small business loan can be difficult for a new concept, but the ability to join a proven system with an established track record of success can make the process much easier.
Some franchises even offer financing or deferred franchise fees to make it easier to get started. All of these factors reduce the friction of becoming a business owner and make it a more viable option for younger adults.
Although millennials may be short on experience when compared to older generations, they’ve been around technology and exposed to online services from for most of their lives. For many millennials, a keen digital savvy comes naturally. This innate understanding of vital new tools gives them an advantage when it comes to adapting to changing technologies and applying these online skills to their work.
This is particularly handy when it comes to promoting a business, as many people from this younger generation have a keen understanding of how to use social media and other digital marketing tools to attract customers. Instead of looking to corporate for tips on how to promote their business, many millennials are able to create and contribute fresh ideas that benefit the entire franchised system, providing them with a way to make an impact beyond their individual location.
The franchising opportunities for millennials – and, in coming years, for generation z – are easy to see. For a huge group of young people who entered the workforce in a difficult economy, the advantages of quickly becoming their own boss show them a path to a meaningful career on their own terms.
Franchisors also see the advantages of partnerships with members of this younger generation, who bring fresh ideas and a keen understanding of new technologies to their systems. There will always be opportunity for hard-working entrepreneurs in of all ages in franchised systems, but the role of younger people is growing and will continue to grow to the benefit of everyone involved.
Harriet Mills is the founder and CEO of Wine & Design.