With millions unemployed and numerous industries struggling because of the coronavirus pandemic, some people who are out of work are considering a new career. As positions dwindle in the fields they are familiar with, people are finding themselves forced to go outside their area of experience. For some, that Plan B could be a blessing in disguise.
Owning a franchise has gained popularity in recent years, even in times of economic prosperity, as individuals have looked for a “second act” in their professional life. Franchise sales often do well in a down economy because unemployed people are tired of the lack of control they have in a corporate setting and are ready to become their own boss. Of course, there are also the additional dangled carrots of potentially more income and freedom.
In my world of franchising, pest control, we are seeing some people who have been furloughed in other industries becoming interested in being franchisees. The restaurant, hotel, oil and gas, and airlines industries have been hit particularly hard in this COVID-19-caused recession. Some jobs in these and other fields may not be coming back.
But the good news is that many of the people whose jobs have been eliminated or reduced have the skills associated with running a franchise successfully. Those skills span the spectrum from leadership to business experience, discipline, technology knowledge and communications. For many of these displaced professionals, franchise ownership may be a natural fit.
Becoming a successful franchisee takes hard work and some upfront money. Getting business loans can be tough in today’s economy. Franchise ownership is more attractive to those with a nest egg or a nice severance package that affords them the flexibility to purchase a franchise. It’s also important to note that “freedom” is a relative word when owning a franchise; in addition to long hours while getting the business established, remember that it was somebody else’s business idea, and you have to follow the script of operating the franchise.
But more and more, franchising is something out-of-work individuals with money to risk and a desire to run their own business want to consider. It requires a lot of research and intense due diligence before signing on the franchisee line. Facing life after layoff and looking for your next move, it’s vital to do your due diligence when investigating a franchise opportunity and to clearly understand what your role will be as a franchisee.
Some of the top benefits of owning a franchise:
• Experience is optional. How many times have you seen a job posting that interested you, but the experience required didn’t match up with your work history? You don’t have to worry about that as a franchisee. The franchisor provides the training to help you gain the skills to operate the franchise. A major part of what makes a franchise successful is an easily replicable system.
• Minimal startup work. One of the most difficult parts of owning a business comes in the startup stage, which involves, among other tasks, writing a business plan and doing market research. But buying a franchise allows you to skip this often painful stage and hit the ground running. The template is in place, the market research for the region has been done, and the business model is well established.
• Risk reduction. When someone decides to buy a franchise, rather than start a business from scratch, they have reduced their risk of failure. For one thing, consumers are already aware of the brand name, and that awareness puts the franchisee ahead of the game. The product and the system have been tested and shown to work, and the franchisee’s access to corporate guidance is a big asset in growing their franchise.
• Additional support. Along with training and ongoing advice received from the franchisor, franchisees can get support from other franchisees in the company’s network. Additionally, the company itself does marketing and advertising on a wide scale that by association helps promote the franchisees’ locations.
• Help in negotiating operating costs. Typically, someone starting a new business as an independent owner is out there alone trying to negotiate prices for items to get their business off the ground. But as a franchisee, often the franchisor already has relationships with vendors, giving franchisees the ability to purchase goods at discounted prices.
If you’re a displaced worker or executive, the franchise industry may be the opportunity you’ve been looking for. It could make life after the layoff better than you imagined.
Chris Buitron is CEO and president of Mosquito Authority.