As many Baby Boomers retire from or exit their long-time career jobs, they are turning to franchise ownership for the opportunity to be their own boss and apply what they’ve learned over the years for their own benefit.
Thom Crimans, a franchise consultant with FranNet LLC, in Louisville, and a long time colleague of mine, made this point in a recent Louisville Business First news article, and I wanted to summarize a few of his key thoughts and add a couple of my own.
Our average franchise client is 40 to 60 years old and often nearing the end of a first career. Some buyers are looking at purchasing a franchise as an additional investment to complement a stock portfolio which has anemic returns. They believe they’ll get a better return by investing in their own business. Even the investor, however, needs to plan for a somewhat active role in overseeing the business. Other buyers are jumping in to their own franchise with both feet and working to build it full time. They consider business ownership to be their second career.
Whatever the reason for business ownership, Thom points out some changes he has noticed with buyers exiting a corporate job. “The evolution has been that people don’t have a full-time career at one job, at one company,” Thom said. “I think I’ve seen a shift from people not being prepared for it to an expected or planned career change. I think I do see people planning for a second career more.”
Restaurants may be the business most commonly associated with franchising, but there are many more options available to would be business owners. Some retail businesses, such as hair care, and cell phone sales and repair, have proven popular in the last few years. And then there are service businesses such as temporary staffing or home senior care which require much less capital.
“Acquiring the rights to a quick-service or fast casual restaurant franchise can require $1 million or more of investment,” Thom said, “largely for overhead related to getting the restaurant started. Restaurants with minimal to no seating still require an average investment of $200,000 to $300,000.”
By contrast, the investment for service-driven businesses is generally less than $100,000.
Increasingly Baby Boomers are buying a business, either for others to operate or to operate themselves.
Then there are those who never planned to work for someone else, and a franchise model is well suited for what they want to do in life. People’s expectations for how you make a living in the United States has evolved. Today an increasing number of young to middle-age adults never had the idea that they were going to work for a corporation in the first place. They were planning all along to go into business for themselves.
If you’re thinking about the possibility of buying a franchise and want to learn more, contact us here.