Fox Business recently wrote about a new trend: franchisees bringing their kids into the business.
It’s hard to think of bringing a second generation into a business as a new thing. From the family farm to the family firm, the restaurateur whose daughter waits tables to the tradesman who puts “& Sons” on the van as soon as his first son is born, family businesses have been around as long as we’ve worked for a living.
But franchises as we known them today have only been popular since the middle of the 20th century. McDonald’s started franchising in the 1950s and the FTC got involved in the 1970s. Hot franchises include venerable businesses that had been around for decades before they started franchising, and newcomers like Jamba Juice which are younger than the average college grad.
So franchises in many cases are just beginning to see those college grads come into the business in a serious way. Only 2% of franchisees, according to a 2013 study, are second generation owners.
Many franchisees’ kids worked in entry-level positions after school or heard business talk over the dining room table. But can a franchisee bring a son or daughter on as a partner? The franchisor interviewed in the Fox News piece was all for it. The younger generation. they felt, was more comfortable with the changes in technology that have come about recently in this and many other franchises.
Whether it’s technological change, changing ways of doing business, or just changes in the marketplace, second generation franchisees may be more in touch with and more accepting of change. However, new technology seems to be the most important of these elements. In one study of large franchise companies, nearly half named comfort with new technology as a plus for second generation franchisees.
Close behind that on the list of good things about second generation franchisees is their realistic outlook. The first generation of franchisees may have been starry-eyed and unprepared for the tough times that come with any new business, but their kids remember spells when they did without gymnastics lessons or there was a lot of macaroni and cheese at dinner time.
Since the first generation made it through the difficult start up years, it’s often the second generation that’s ready to get ambitious. Some people who buy franchises are taking up a second career after retirement or looking for something they can do on the side while they bring up children. Their kids may see the larger potential.
The same study also found that the “and sons” are often more professional in their approach than their parents were, more likely to take an executive approach and more willing to delegate. Sometimes the original franchisee took on the business for the love of the goods and services being provided, while the sons and daughters may have always looked on the business as — well, as a business.
If you’re looking for a franchise business opportunity now, you might want to consider choosing one you’d want to pass down to future generations. Remember, though: the franchisor has to consent — one significant difference from other types of businesses.