Franchising is not just an old man's game. Here are five ways to make it as a young franchisee.
Sam Christopher Lim
SVP for Marketing and Strategy, Francorp Philippines
At the young age of 26 years old, Ivan Kenneth Taw decided to leave a promising marketing career behind to become a franchisee of convenience store chain 7-Eleven. Four years later, he now owns two 7-Eleven outlets, and wants to own more outlets in the near future.
Taw is just one of the many young franchisees in the country today, who have taken to franchising as a viable alternative to corporate employment or starting their own business from scratch.
It used to be that franchising was seen as an “old man's game,” seen as a great investment for experienced professionals who are looking to retire early. Now, franchisees are getting younger—some parents have even taken to purchasing affordable food cart franchises as graduation gifts for their children in order to get their feet wet in managing a business.
Indeed, franchising is a welcome alternative for some young individuals. After all, unemployment is still a pressing issue—even as the country's unemployment rate has decreased to 5.4 percent in July 2016, that still leaves around 3.7 million unemployed, 76.4 percent of which are millennials between 15 and 34 years old.
If you are a fresh graduate or a young professional looking to franchising as an alternative career path, then follow these tips on how to make it as a young franchisee.
1. Assess your motivation.
Whether you're young or old, buying a franchise should be a well thought out decision. What are your motivations for buying a franchise? If you're doing it just because you can't find a job and want something to keep you busy while finding the right career, then it's not a good start and the franchise business will inevitably suffer for it.
Contrary to what most believe, owning your own franchise business is not going to be easier than holding a corporate job—it also requires a lot of hard work from your end. You will be in it for the long haul, as most franchise contracts last for around three to five years. And beyond the expected profit, what owning a franchise business can also give you is experience and growth, which might prove useful once you actually decide to put up your own business.
2. Research your options.
There are over 1,500 franchise brands in the country, so it will serve you well if you research the different franchise concepts and brands that you want to invest in. It also helps if the franchise business has a product or service which you personally believe in and patronize; that way, it will be easier for you to comply with its franchise system and to market its products and services. Go to franchise expos, research online, and attend seminars and talks to get yourself exposed to various franchise concepts before deciding on one.
A quick rule of thumb: If a franchise sounds too good to be true, it probably is. There are still a few franchisors out there that prioritize upfront fees and quick income, and think less about the longevity of the business. These franchisors usually target young franchise buyers who still don't know how to tell the difference between a “get rich quick” franchise (where the franchisor gets rich quickly and the franchisees end up suffering) and a legitimate franchise business which always goes for a win-win scenario.
3. Learn as much as you can.
As a young franchisee, you will have the benefit of learning business systems and operations at a much faster rate. Franchising tends to not only speed up business growth, but to also speed up the transfer of knowledge. Competencies related to management and leadership, which would usually take you decades to learn in a corporate environment, can now be learned faster thanks to the daily operations of a franchise business.
Some franchisors actually prefer young franchisees as they are seen to be more flexible and willing to learn, even seeing franchisors and key managers as business mentors, and are also likely to be more technologically savvy than their older counterparts.
4. Check your finances.
As with any investment, make sure you have enough funds to finance your franchise business. As a fresh graduate or a young professional with little savings, it might be tempting for you to just settle for any franchise business because it's all you can afford, which is often a bad start for any venture. There are a lot of ways around financing the initial investments for your franchise business, such as taking out franchise loans and even asking a franchisor for friendlier payment terms.
Your first “angel investors” can also be your parents and older siblings. However, still keep it professional—present a business plan to your family which will detail your investment needs and how they can possibly get returns from their financial contributions. Also, will they manage the business with you, or will they just be passive investors? Clear up certain expectations from the start so as not to end up causing family disputes just because of money.
5. Embrace your youth.
Don't see your youth as a disadvantage to running a franchise business; in fact, you can make it work for you. Being young, you still have the time, energy, and enthusiasm to be fully hands-on with your franchise. Franchisors are also more than eager to tap into the digital marketing knowledge of their young franchisees.
Getting an early head-start in the franchise business will also give you enough room to learn from the mistakes you make along the way—being young, you can fail fast and learn fast. You have your entire 20's and 30's to keep on pivoting to figure out what your true niche is. So instead of jumping from one job to the next trying to figure out your passion and calling, perhaps you can also give franchising a shot early in your career to see if it's for you.
Originally published on www.entrepreneur.com.ph
Are you a fresh graduate or a young professional who wants to get started in franchising? Join a seminar on How to Invest in the Right Franchise. To know more about the franchise brands which are ideal for you, you may contact U-Franchise Sales and Management at (02) 634-0586, or firstname.lastname@example.org.
Sam Christopher Lim is the senior vice president for marketing and strategy at franchise consultancy Francorp Philippines; president of U-Franchise Sales & Management; and chairperson and director for special projects for Asean integration at the Philippine Franchise Association.