It’s Not Your Grandfather’s Franchise!

Posted by Tom Scarda, Certified Franchise Executive on Nov 22, 2020 9:00:29 PM

In franchise consultant, life decisions

It's time to say goodbye to the old franchise business model. The new 2020, advanced model is like a smartphone compared to the old ma' bell rotary phones. Franchise outfits industry-wide are dialing in. The rate of franchise growth was exceptional in 2020, even considering the effects of Covid-19. The projection for 2021 looks even better. 

At a recent Franchise conference, my friend and fellow Franchise Consultant, Rick Bisio, author of The Educated Franchisee, offered an interesting view. He suggested that there are three chief reasons franchising is currently shifting and expanding more than any time in history: private equity, technology, and ease of ownership.

It seems that private equity firms have discovered the power of the franchise model. These 'cash/rich' firms are investing heavily in franchise concepts. The influx of money into a small, emerging franchise company enables the franchisor to invest amounts of money not seen before, making the concept highly sophisticated.

Today, franchises have the best, cutting edge technology that money can buy. Even in newer franchises, it's not uncommon to see state-of-the-art call centers, online management systems, automated scheduling systems, GPS vehicle-routing logistics, website optimization, and consumer-facing smartphone apps, to mention a few of the exciting, progressive advancements I've seen recently.

A fatter bankroll allows companies to hire the best talent to head up the franchises and also add lots of support personnel to onboard and train new franchisees. Because the franchise doesn't have to sell new franchises to pay their monthly corporate bills, they can be more selective about who they award franchise licenses to, adding strength to the company's equity for the long haul.

Because of all the technology in these business operations, it's easier to operate many franchise businesses remotely. When a potential franchisee knows they can start a business and not have to leave their current employment, it eliminates some of the risk and associated fears that often come with leaping into business ownership. With that, the prospect pool of great people with vast corporate experience has become much more extensive. It gives a franchisor more opportunities to award licenses and grow fast.

A franchise system enjoying a cash injection from a private equity investment firm has significant competitive advantages over non-franchised businesses. The capital puts the franchise in a position of influence in a market, enabling it to achieve 'household name' status in far less time than ever before. A savvy potential franchise buyer, investing with a well-positioned franchise means an easier exit strategy and a more lucrative payout when the time comes to sell. 

So, are you thinking about changing your career?

  • Do you have money sitting on the side, not making interest?
  • Have you tasted freedom because of the pandemic and working from home, and thinking about not commuting when the virus is gone?
  • Now maybe the time you've been waiting for

With all the best technology and seasoned executive staff at your disposal, you can dip a toe into ownership, keep your job, and truly minimize your risk.

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