The usual motivators for owning a franchise also apply to the older population. Desire for independence, running your own show, and financial freedom entices millions of seniors and retirees to seek franchise ownership. According to Franchise Business Review, older Americans are becoming a fast-growing segment of those buying franchises. The percentage of people 55 and over who are franchise owners has risen from 20 percent in 2007 to 28 percent recently — a 40 percent increase. Franchise operations not only satisfies the desire to run a business but it also provides a means for doing it easier than starting from scratch.
Older Americans feel more of a need to find a safer path for controlling their own destiny, a path that doesn't feel that they are doing it alone but that has an established infrastructure and support mechanism backing them up. Franchise expos seem to attract higher and higher percentages of attendees 51 and older. Why such an interest from this growing aging population? The changing economic environment drives the fear of loosing ones job and not being able to replace it, whereas the ones who already lost their lucrative positions can't seem to be able to replace them. Outplaced or soon-to-be outplaced executives with significant savings looking to replace a six-figure income are an increasing percentage of franchise candidates.
Franchise opportunities often represent more of the traditional types of businesses, a far cry from the next technology/social media whiz job, and easier for older Americans to relate to. This aging demographic group typically has the following profile characteristics:• Managerial or executive experience, managing operations and employees
While comparing the various franchise business models out there, it seems that retail food would be the first choice for seniors or retirees. It offers a more reactive type of sales involvement, relies more on how well employees are managed, and offers a path to multi-unit expansion. It also allows more of a community feeling where clients visit and have the opportunity to interact.
Interestingly though, this age group also seem to be moving beyond traditional fast-food franchises to service-based businesses. The reason for this is that those service-based models require less up-front investment, but also offer more opportunity to affect people's lives, even though they demand a more proactive sales involvement and tend to take longer to reach profitability. As an example, the Home Care franchise model appears to be one of the more attractive ones to the older generation demographic. It falls in the business to business and business to consumer service quadrant, with less money up front compared to retail, scalability, and an ability to have a positive social impact.Another interesting behavior our senior and retiree demographic seem to demonstrate is their overall approach to how they view the business. They seem to have more of a build-and-keep attitude, looking at their investment as something that can maintain them through their later years. This is perhaps because they view it as something that will last until they really want to exit the workforce, or something they will pass on to their kids and grandkids. Either way, Franchisors of all persuasions are just thrilled to have this demographic knocking at their door.
Mr. Georgiou is currently the President of CrossRoads Business Brokers, Inc. & www.TheFranchiseCrossRoads.com, and has been involved in a great number of business transactions over the last 10 years. He is also a national Franchise Consultant with FranChoice advising hundreds of franchise Candidates in their search for a franchise. Since 2008, he has been a successful multi-unit owner/operator of a Home Care Franchise in California. Previously, Mr. Georgiou was a former Senior Manager with KPMG Consulting (BearingPoint) where he advised and assisted various Mid-Market companies with operations, strategy, and systems.