Young Franchisees and Entrepreneurs
Don't be afraid to make mistakes; if you don't make mistakes, you're not reaching far enough.–
In recent years there have been rapid and instrumental changes to the employment landscape for young people. The major change to the pre-existing employment structure is the lack of permanence now evident in roles that were previously considered 'jobs for life'. Internship and apprenticeship opportunities have increased to the detriment of secure, permanent employment and zero-hour contracts are still a reality for many workers. Millennials, perhaps in response to this, are unafraid to change their jobs and are estimated to do so up to twice as frequently as those who belong to Generation X.
A large part of this is a cultural change, which finds young entrepreneurs unwilling to remain in a position which does not allow them freedom of movement, of creative thought and of opportunity. The Millennial generation is willing to work hard but on its own terms and those terms are what make young people ideally suited to franchising. Many young entrepreneurs are attracted by the concept of starting a business and the franchise model can be the perfect match for a young, driven person with defined goals and the ambition to thrive.</br>
The proven business model of an established franchise and the expert guidance, training and support offered by the right franchise is a recipe for success when combined with youthful exuberance and passion for the business itself. There are many elements which mean younger people can be a great fit for franchisors including that they are generally digitally savvy and computer literate, and often have the natural energy and enthusiasm required for franchising success.
A big obstacle for a lot of prospective young franchisees is the costs involved. Despite the increased likelihood of profitability from franchising when compared to developing an original business concept, having the capital needed to reach the minimum investment required by a franchise can be a problem. Fortunately, there are a wide range of options that the burgeoning entrepreneur can consider including:
- Government-funded schemes – the IDC (Industrial Development Corporation) in South Africa is a financially self-sustainable entity that can provide support for entrepreneurship development. There are also a number of industry-specific grants available, such as the Sector Specific Assistance Scheme (SSAS), and grants available for certain demographics, such as the Women Entrepreneurial Fund.
- Banks – these will normally fund a high percentage of the start-up cost of a franchise that has a good, well-established name. Standard Bank has a strong background in assisting franchisees, and Nedbank offers partnerships to help get you going.
- Friends and family – it is a popular option for many to seek financial assistance from a trusted and well-known source. Family and friends may be willing to provide the financial resources for recognised franchises. It is important, however, to treat this agreement as professionally as you can.
The Do's and Don'ts of Becoming a Franchisee
For any franchisee there are crucial pieces of advice to heed. For a younger person embarking on that journey, these three points are especially important.
1. DO your homework.
Identifying the area you have an interest in, that is suited to your strengths and that appeals to you, is crucial. Finding something that you genuinely care about makes the hard work seem much easier, so it is essential to know what it is you are actually looking for from a franchise.
Once you've done that, you need to find the best fit for you in that area. Having a look at message boards or sites for franchisees can provide a frank, broad and honest appraisal of what it's like to be a franchisee within a particular franchise. Meeting franchisees face-to-face, so you can pose any questions or concerns you have to them, is also useful.
There is nothing wrong with taking your time and really exploring the business you’re buying into. If your heart is set on going with a specific franchise then it's easy to ignore potential setbacks, so being prepared to take on board all feedback – both good and bad – from those in the know is crucial.
2. DON'T be afraid to seek out experienced professionals.
No matter what your age or background, it is impossible to embark on any new venture without making some mistakes along the way. It makes sense to talk to people who've been there, done that, so that you can at least sidestep some of the more common errors new franchisees make.
Keep an eye out for seminars or Q&A nights that might be close to you. Talk to franchisees in the area you are looking to enter, or even ones who are operating in a completely different sector to the one you are considering.
A lot of the mistakes and pitfalls for franchisees are universal e.g. not being financially or mentally prepared, failing to properly research your industry, or mismanaging your time. Therefore, it is important to tap into every drop of experience and expertise that you can, to help you start on the right foot.
3. DO know what you're getting into but DON'T lose heart.
Starting off will be a challenging period, and it's important to stay positive and keep reminding yourself of why you've taken this step. This underlines the importance of choosing a sector you have an interest in: if you are feeling tired or stressed, knowing you're trying to build something you have a passion for will drive you forward. Having the right support network around you can also ensure that you never feel that you are in too deep.
Make sure you understand exactly what your franchise agreement entails and that you can fulfil your obligations to the franchisor. Franchise agreements are long-term binding commitments with terms and conditions. Although you will own your own franchise, you still have to answer to the franchisor and you are not in complete control. By understanding, negotiating and preparing for the consequences of entering into a franchise agreement, you can ensure you will be in a better position for success.
Case Study: Tim Harris – British Franchise Association (BFA) Young Franchisee of Year Nominee
In 2015 Tim Harris was nomimated for the BFA Young Franchisee of the Year award, having started his Anytime Fitness gym franchise franchise at the age of 29. Tim currently runs a hugely successful branch of Anytime Fitness in Welwyn Garden City, Hertfordshire, England. Anytime Fitness is a global gym franchise running local gyms in a convenient and affordable way.
What drew you towards becoming a franchisee?
I have always dreamed of owning my own gym. When I worked in the Anytime Fitness in Hemel Hempstead and the franchisee headquarters were next door, it seemed like the perfect opportunity to make that dream a reality.
What was your background before you became a franchisee?
I have always been into fitness and coaching. I trained as a personal trainer and was doing that for a couple of years before taking on the franchise.
Why did you decide to opt for a fitness franchise?
With my background in fitness and the opportunity in front of me, it just seemed too good an opportunity to turn down. Doing a bit of research into different franchises, Anytime Fitness seemed to be a solid model with a great support structure.
Did you have any financial assistance?
Myself and my two business partners were able to secure the funds for the business ourselves.
What advantages do you feel your relative youth has given you as a franchisee?
During our pre-sale period, I think it definitely helped me keep my energy levels high so I was able to greet new members with a smile and start building that important rapport straight away.
What advice would you give to a younger person considering becoming a franchisee?
Use all the support and people around you that you can. There is absolutely nothing wrong with asking for a helping hand and one day you will definitely be in a position to pass the favour onto someone else who needs it.
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