The times have really changed. Just a decade or two ago, franchising used to be something that was only considered by high-income baby boomers as a kind of capstone to their careers.
Lifelong business experience and managerial know-how undoubtedly helped older franchisees hit their stride early. That said, franchisors are increasingly finding that millennials have a lot of positive traits that more than make up for their relative lack of experience.
For example, millennial franchisees are highly literate when it comes to technology, social media, and forging networking connections.
The rules of the game have also changed slightly, since there are more turnkey franchise investment opportunities, more reasonable net worth and liquidity requirements, and more chances at obtaining franchise funding. Millennials are upbeat, adaptable, energetic, and ready to take on the challenge!
Millennials—a.k.a. the Generation Y or Net Generation that came into young adulthood in the 21st century—have taken a look around and decided that franchising really makes sense.
As a general rule, millennial franchise investors are more free-spirited and less attached to tradition—and this includes traditional, corporate types of employment.
Millennials are typically open-minded, but they also say that they’re looking for collaboration (versus competition), inspiration, and a mission-driven work environment in lieu of the corporate grind.
All of these things—plus recession-resistant franchise markets—are brought into millennials’ lives with franchising. That’s part of the reason that millennials are expected to make up 50% of new franchisees over the next year. Most millennials are adaptable and eager to get started.
This might be true of some millennials, but it’s hardly a fair way to characterize an entire generation. When you take a look at the numbers, millennials are emerging as the next generation of franchisees, partly because they disproportionately come from high-income households.
Over six million millennial households earn more than $100,000, and the millennial generation comprises a quarter of households making a half-million dollars or more per year. A lot of that is thanks to private business ownership and entrepreneurship in general.
So, much of the time millennials have the financial resources to make it happen, but they might lack the direction or even the knowledge that franchising is a possibility.
Putting millennials in the know has, therefore, been a recent aim of the International Franchise Association’s NextGen program, through which millennial franchisees can find potential funding, sponsors, and mentors.
Crowdsourcing is all about drawing on community support and combining a bunch of small contributions to equal a larger goal.
There are even crowdsourcing sites out there specifically formulated for franchise funding. CrowdFranchise is one of the newest such sites on the scene.
The U.S. Small Business Association directly provides government-backed loans to qualified franchisees (usually requiring a >650 credit score), but their website also refers to other websites like BoeFly and Franchise America Finance.
These are both great resources that can help millennials get the seed money they need to hit the ground running.
Interest rates are extremely low right now and banks are looking to lend. Many banks also have loan options specifically tailored to future franchise owners.
Just make sure to have your financial information and credit score in order. A franchise business plan and recent tax returns might also help you secure a private loan. For more information about the franchise opportunity, contact us today.