Is there a franchise in your future?
Closet entrepreneurs can be in business for themselves
For many people, the thought of becoming a small business owner is an idealistic dream. The idea of giving up a corporate gig for a shop on the proverbial main street sounds exhilarating and fulfilling. But then considerations of mortgages, family, saving for retirement and all the responsibilities that come with adult life creep in, and the small business dream slips back to the “maybe someday” category along with skydiving and that trip to Bora Bora.
As it turns out, closet entrepreneurs and small business hopefuls can be in business for themselves without being by themselves and the solution is coming from the widely growing sector of franchising. The franchise industry has made national headlines with impressive statistics shared in the Franchise Business Outlook: 2016 that show for the sixth consecutive year, franchise businesses will grow at rates that exceed non-franchise businesses, outpacing the economy. The report includes staggering statistics announcing a 3.1 percent increase in job creation to top 9.1M, the addition of more than 13,000 franchise establishments, and economic output estimated to hit $994B.
Not only is franchising a growing sector of the national economy, stats show that Colorado and Denver specifically are ideal locations for franchise business growth. Colorado workers are also exceptionally productive, consistently ranking in the top 10 for per capita gross state product and Forbes Magazine recently deemed Colorado to have one of the two best labor pools in the country. Entrepreneur Magazine recently named Colorado the second best state to start a business and according to Business Insider, Colorado has the fastest growing economy out of any state in the country.
Franchise ownership allows individuals to pursue their entrepreneurial dreams with significantly less risk than starting say a craft brewery or knitting shop from scratch. With the franchise model, a franchisor licenses the rights to its name, operating procedure, designs, and business expertise to a franchisee. Benefits of franchising include an established template for success, brand recognition, shared marketing, corporate training, and support.
So who is qualified to be a franchise owner? Just about anyone. Franchising is not just for 20 and 30-something entrepreneurs. In fact, Baby Boomers are a largely growing percentage of the franchise-owning population. Marty Welch, chief executive of Legacy Franchise Group, says older workers are increasingly turning to franchise opportunities.
“Franchising has a track record and is not as risky,” he says. “Depending on the skill set and what they want to do, it could be a good avenue for them in their twilight years.”
Opening a franchise can be a smart equity building move later in life since franchisees can immediately leverage a successful business model with built-in support and the backing of a well-known, well-established brand.
The franchising model has also proven to be a successful career choice for vets for several reasons: veterans have strong leadership skills and a thorough understanding of teams, and the franchising model provides a system and training which can be very useful to an individual who has completed their service and wants to work for his or her self.
According to a 2014 International Franchising Association report, nearly 204,000 veterans have started careers in franchising since 2011 - more than 5,600 have become franchise owners. Citing Census Bureau data, the IFA estimated that more than 66,000 franchises in the U.S. are owned by veterans. In 2014, 52,333 veterans found employment opportunities across 13,446 franchise business locations, according to the IFA survey.
For individuals who are interested in exploring franchising, getting started begins with simple research:
Familiarize yourself with the two main models of franchising:
Product or trade name franchising: The franchisee uses the trade name, trademark and/or product from the supplier or manufacturer. Frequently used in the auto, soft drink and gasoline service station industries, this model consists primarily of the distribution by a single supplier of manufactured products to dealers who in turn resell to and end consumer.
Business format franchising: The franchisee uses the franchisor’s product/services, trade name, trademark and the prescribed business format. This model ensures the franchisee has extensive knowledge and support in a variety of business activities including financing, accounting systems, legal support, training, operations, marketing, and promotions.
Explore the options: Visiting a franchise expo, such as Franchise Expo West in Denver Thursday, Oct. 6 through Saturday, Oct. 8, 2016 is a good opportunity to talk to people within the industry, familiarize yourself with brands and the franchise system, and learn what types of businesses might interest you as a future business owner.
Start running the numbers: Leaving the safety of the corporate net is a scary moment. Start thinking about your individual and family budget, your long-term financial goals, and how much cushion you need to take a leap and leave a salaried position. Review the financial terms of the franchise models to see if they fit your personal financial goals and expectations.
For those looking to escape the corporate doldrums or explore a second career, franchising is an attractive sector for consideration. Between the local Colorado climate being ripe for business growth and lower risk factors of the franchise model, many individuals are considering franchising for their next career move.
The Franchise Expo West costs $10 to register in advance and $20 at the door, but those who register at www.franchiseexpowest.com and use Promo Code FPR can receive a complimentary pass to attend the show. On-site registration is also available, but pre-registration is recommended.
Jim Mastandrea is Group Show Director for MFV Expositions and the Franchise Expo West, welcoming aspiring entrepreneurs to Denver, Thursday, Oct. 6 through Saturday, Oct. 8, 2016. For 25 years, MFV Expositions has been producing the leading franchise events worldwide that consistently bring together franchise concepts, at all investment levels, with the most qualified visitors seeking to own their own business. In addition to quality franchise expos in the United States and overseas that offer face-to- face opportunities to grow a franchise, MFV also offers access to online franchise opportunities through web-based resources.