Over 20 years I have worked with many types of buying groups. As varied are the buying groups are as varied as the reasons for wanting to own a franchise. It is clear though that most investors are attracted for one or more of the following. Which if any of these rings true for you?
- Control Issues. Many prospective franchisees are driven by the frustration they’ve felt in past employment situations where they didn’t have enough control of their work environment to influence results in the manner they desired. Perhaps they had an over bearing boss, a parent corporation that wouldn’t listen, or something comparable. In any case, they are drawn to the idea of being their own boss, having the final say in relation to business decisions, and being able to accept either the credit or the responsibility for whatever outcome their business produces.
- Economic Need. In the past 15 years, I’ve seen an increasing trend in large corporations to displace more experienced managers in favor of less experienced (and therefore less expensive) workers. This dynamic has created a pool of experienced managers in the 45–62-year-old age bracket who have found it quite difficult to gain employment comparable to what they had before. In many cases they cannot afford to retire and need to create a replacement income. More and more, these experienced managers are being attracted to franchising as a vehicle to accomplish this goal without the fear of having to go through another “downsizing” again in the future. Loyalty simply is hard to find these days. The days of spending your whole career with one company is done.
- Lifestyle Issues. One of my favorite drivers is many prospective franchisees want to take control of lifestyle issues. I see a steady stream of potential investors who talk about their desire to reduce business travel, job related stress, and the number of hours they work per week. Who really wants a boss that can tell you when to show up, when to leave, when to take lunch, when and how long you can go on vacation or when you can go to a parent teacher meeting or kids’ soccer game? They often also want to find businesses with down times at certain points in the year so they can take more time off with their families or for other leisure activities. The advantage of franchising to these people is that there are so many options to choose from, with help, you can find opportunities that match these desires.
- Wealth Creation Goals. Many of my prospective franchisees have figured out that though their work efforts may be creating a significant amount of income, in most cases they are not sharing directly in the wealth they are creating. They will put in their forty plus years and then retire on whatever they’ve managed to save plus Social Security. Many investors are attracted to franchising because they understand that their efforts have the potential to create significant amounts of wealth, real equity, and they will be the ones who own the wealth that is realized when it comes time to sell the business they’ve built.
Though there are other reasons that an investor might be attracted to any given franchise opportunity, one or more of these four reasons will always be present in the prospective franchisees motivations.
If you want help defining your goals, please reach out at 443.977.8550.
