You are using an outdated browser. Please upgrade your browser to use this site.

7/9/2019

Generational Turnover in Franchise Ownership

A new trend in franchise ownership is taking hold, and brands are responding positively.

As franchisees of the baby boomer generation near retirement, young owners who are new to the franchise market are starting to buy out their stores.

But how did this trend take off, and where is it going? Let’s start with looking at generational trends in the workplace.

Millennials in the workforce

With millennials accounting for the largest generation in the U.S. labor force,1 it’s no surprise that the franchise market is seeing a changing of tides. According to Pew Research Center, 56 million millennials (those ages 23 to 38 in 2019) were working or looking for work in 2017. While boomers made up a majority of the nation’s labor force in the early and mid-1980s, their size in the workforce shrinks each year as they reach retirement.

For many millennials, the job market was bleak at the start of their careers. Some have sought creative alternatives to the traditional nine to five corporate job, including becoming a franchisee. The costs can be similar to paying for graduate school, with the pay typically being much better.

Franchise opportunities for younger generations

Some young franchisees get into the business via baby boomer parents who are willing to hand over their stores while offering training and support. Others simply see the potential for monetary success and have the enthusiasm and drive to learn the franchise market inside and out.

Brands are increasingly using incentive programs to encourage older franchisees to bring young franchisees into the industry. These programs typically offer rewards for selling stores to new owners. For example, if a franchisee owns five stores and chooses to sell a store to a new owner, he or she can receive discounts on marketing and other costs for the remaining stores.

The prior owners can be great mentors to the new franchisees they sell to. While younger workers typically have the energy and technology savvy to run a franchise, an experienced advisor can help provide the other hard skills a young franchisee needs to succeed.

Financing a franchise 

Franchisees of any age need a trusted partner when it comes to financing restaurant equipment and securing franchise loans. Are you looking to take advantage of a franchise opportunity or improve your stores? Rely on CIT for franchise projects ranging from $2,000 to $3 million.

  • Debt refinancing
  • Equipment/tech upgrades
  • Network acquisitions/partner buyouts
  • New stores
  • Property improvement
  • Real estate
  • Recapitalization
  • Remodel/reimage
  • Store acquisitions/partner buyouts
  • Working capital loans

Recommended Articles

3 min. read

Putting Labor Day to Work

Labor Day is the third most popular American holiday, trailing only Christmas/Chanukah and Memorial Day in the national consciousness. For small business—the backbone of the American economy—it’s more than the end of summer: it’s a holiday filled with opportunity.

Let's explore