Why Aren’t There More Millennials In Franchising?

When you think of the franchising industry Millennials probably aren’t the first thing that come to mind. Many of us would go straight to thoughts of Mum & Pop partnerships formed out of a desire for a flexible working lifestyle and a business they can call their own. However, the franchising model and Millennials have a lot to offer each other, and could just be the perfect partnership.

Whilst the most obvious reason to entice Millenials to get involved in the franchise industry is the fact that someone has to take over the hundreds of franchise businesses currently operated by franchisees approaching retirement, there are so many other reasons the industry could be a good fit for the countries youngest entrepreneurs.

Employment opportunities for young people are few and far between, and as a result new businesses and start-ups are popping up everywhere as Australia’s youth try to find their place in the workforce. It is well known that Millennials have taken a different approach to employment than the generations that came before them, and one of the major differences is the importance placed upon work-life balance. Striving the find a lifestyle that allows flexibility and versatility whilst also providing a level of stability and independence, Millennials may just find that franchising is the right fit for them, so why are there so few in the industry?

The reason is a combination of two things, the first being that many franchise brands have failed to realise the benefits of bringing Millennials into their business, and the second being that those who have, aren’t quite nailing the marketing.

Slowly but surely young entrepreneurs are starting to invest in franchise businesses, however the uptake has been slower than the generations that came before them, partly due to a lack of interest from franchisors recruitment teams. Many franchisors see Millennials as a risk, widely known for their short career tenure as they search to find a role that gives them purpose. The media shines these attributes in a negative light, however in an ever-competitive business landscape, drive and ambition to succeed could bring new life into plateaued franchise brands.

Another important consideration for the long-term success of a franchise brand is its ability to adapt and grow. Bringing younger franchise partners on board can help businesses achieve exactly that. Technological innovations continue to play a major role in almost every industry across the globe and franchising is no exclusion. It is vital that brands are able to navigate their way through the changes brought on by such innovations, and who better to guide a brand through this new landscape than the generation that fueled the change. Millennials are the first generation who could be considered digital natives, and the skills they bring with them in the space are an invaluable contribution to a sustainable business model for the future.

So, why are franchise brands that see the benefits of Millennial franchisees struggling to get them to invest? Many may think a lack of savings, or an inability to get a loan may be a major barrier. However, many Millennials are struggling to find a franchise brand that connects with them, and it’s not because they aren’t out there. Franchisors simply don’t know how to market to Millennials.

As a generation who learnt to tune out sales pitches, approaching with a hard-sell tactic isn’t going to work. Millennials don’t want to be sold too, they want access to information so that they can make a purchase decision when and where it suits them, an approach franchise recruiters haven’t necessarily adapted too.  As when marketing to any audience, it is important to reach people where they spend their time, for Australia’s youth that is websites, blogs and social media. This is where the next generation of business owners are looking for opportunities, and franchise brands simply aren’t utilising the platforms very well.

Ultimately, Millennials are a great fit for the franchising industry in more ways than one. Whilst brands benefit from an influx of young talent with a new and different skill set to their existing network, Millennials are able to invest in a stable career opportunity that comes with the flexibility and independence of self-employment.

How Well Does Your Franchise Network Embrace Change?

When it comes to franchise networks, it is a well-known fact that implementing change can be a tough job. A lot of the problems stem purely from the logistical difficulties faced on both the franchisor and franchisee sides of the business that come with implementing any changes, but another important element is the networks willingness to embrace it.

Whether it be a re-branding activity, a move to a new system or procedure, or the introduction of a new product that requires buying equipment or stock, the process of making change within a franchise business is often met with resistance. Franchisors see that change is necessary and key to a businesses survival and success, however it is often the way they go about implementing such changes that ruffles feathers within the network.

When planning a change to be rolled out across a franchise network, it is vital that each and every franchisee is able to understand the reason behind the decision. Taking on a ‘because we said so’ attitude will be met with resistance everytime, and if franchisors can’t make their case as to how the change will be beneficial to the franchisees business, it will just be seen as an inconvenience.

Conducting a cost versus benefits analysis to detail the impact of the change is a great selling point when it comes to getting franchisees on board, especially if the business owner will be incurring a significant expense. It is important to consider that despite being part of a larger franchise network, many franchise owners likely have a plan in mind for how they see their business growing. Asking them to get on board with an unexpected change may be a strain and misalign with their current plans for themselves and the business, particularly if it effects their time or financial commitments.

Another point that gets raised often when discussing the topic of change within franchise networks, is that franchisors should lead by example. Implementing changes in corporate run stores, or with a select group of eager franchisees is a great strategy to actively show the rest of the partners why the change is needed. This strategy can act as a trial period to eliminate any issues before a network wide roll out, and if all goes well will leave you with a group of franchisees to act as positive ambassadors for the change.

This is the first step towards a collaborative approach that gets all parties involved in the decision making process. Opening the proposed change up to recommendations, questions and comments can help air any grievances and answer any burning questions. Embracing some form of collaborative change process often leaves everyone feeling more settled and open when the time comes. Having been involved from the start removes any element of surprise, and gives the network time to have input.

However, franchisors shouldn’t wait until they want to make a big change, to prepare their franchisees. In any franchise group it is vital that willingness to embrace change is encouraged and embedded in the company culture. This starts with the type of prospects that are recruited into the business and is maintained through building a positive association with change and a high level of trust between the franchisor and franchisees.

When dealing with any large network of franchise partners a unanimous decision is unlikely. But taking these steps to foster a company culture that sees change positively and actively following a collaborative process will make all the difference next time your franchise network faces change.

What Franchisees Value Most In Their Field Managers

The definition of a field manager and what is encompassed in their role varies greatly across different franchises. Nevertheless, the impact that field managers can have upon the successful operation of a franchisees business is significant. So whether you are a franchisor looking to hire or a field manager yourself, it is important to understand what franchisees value most in their field managers.

An insightful study conducted by Franchise Relationships Institute asked 750 franchisees ‘Based on your experience, how likely would you be to recommend your field manager to another franchisee?’ The franchisees that regarded their field managers highly were then asked ‘What does your field manager do that adds the most value to your business?’.  The answers of those franchisees helped to establish 5 key areas of value within the franchisee – field manager relationship.

1. Performance Focused

An outstanding 21% of franchisees mentioned that they value most when their field managers focused on improving business performance through sales growth and profitability. This included taking time to help franchisees analyse and better understand their figures, and sharing what lead to success for other franchisees in the network. With a notable mention was their support for Local Area Marketing campaigns, conducted to help drive business.

2. Engaging & Constructive

Franchisees described successful field managers as easy to talk to and engaging. 21% of those surveyed said that they valued their field managers motivation and positivity, adding that when giving feedback they were constructive rather than critical. Franchisees said they looked forward to their field visits and felt that they could take on board their advice without feeling defensive.

3. Dependable

One fifth of franchisees surveyed mentioned they highly valued the dependability of their field managers. In particular they mentioned that they liked when field managers were responsive and prompt when following-up, and that they were available for help when needed. Other field managers who were perceived to be less organised and professional were often called ‘missing in action’.

4. Honest & Informative

20% of franchisees surveyed described successful field managers as informative and straight forward. They went on to say that they were well informed regarding issues impacting their franchise business and were direct and honest in their communications. It was also noted that they valued field managers who facilitated open communication with head office to better resolve issues.

5. Considerate & Caring

Field managers can often be the first point of contact during trying times for franchisees. This is reflected by the 18% of those surveyed said they valued field managers that showed genuine care and compassion towards the success of the franchisees business. Many surveyees recalled times where their field managers checked in to see how they were and listened openly to their concerns.

Ultimately, the roll of both field managers and franchisees is inherently stressful and often the relationship can become strained if either party fails to meet the others expectations. Studies such as the one noted above provide critical insight into what is valued by franchisees to help field managers better understand areas where they can best offer value.

Why You Should Consider Local Area Marketing

Local area marketing (LAM) is the activities undertaken by franchisees to market and advertise within their local communities. Unfortunately, many franchisees choose to cap their marketing efforts at their contribution to their franchises national marketing fund, failing to realise the impact LAM can have on their business.

Whilst LAM can be vital to the success and growth of an individual franchise, franchisors often make it difficult for franchisees to feel as though they can undertake such activities, due to strict terms in their Franchise Agreements and a lack of support and guidelines. Often such agreements stipulate that franchisees must gain approval to conduct LAM, which isn’t without reason, as franchisors have worked hard to create and maintain a particular brand image. However, franchisees often find themselves lacking any guidance or materials to take the next step without potentially compromising the brands national image.

Nevertheless, LAM can be the element that makes or breaks an individual franchise, and franchisees should develop a plan to appeal to their local area and seek approval from their franchisor to launch it.

LAM has a wide range of benefits, including increased awareness, engagement and reach amongst the local community. It also aids in building customer loyalty and gaining repeat business. For franchisees, establishing a positive brand image within their local market is what will help the business survive long-term.

Often, especially with the rise in popularity of independent small business, consumers are turning away from the concept of large national chains, and feel driven to support local business. This is why it is key that franchisees are able to make this connection with their local community, and ensure that consumers can see they are one in the same.

Whilst LAM can be done through many channels, social media pages continue to prove the most popular form of community outreach. However, involvement in local events can be a highly effective awareness building tool, and sponsoring of local clubs and sporting teams can further cement customer relationships.

The good news is, LAM doesn’t just benefit the individual franchise, but can help build upon the reputation of the brand as a whole. Research by The Nieman Journalism Lab shows that social media posts targeted to smaller geographic locations are six times more successful than globally targeted posts. The high levels of success achieved through LAM suggests that franchisors should be taking action, encouraging their franchisees to invest in LAM, and providing the support and materials to help them do so in line with the national brand image.

In the start-up and expansion stage of a franchise, the majority of capital often goes to funding equipment and fit-outs, leaving very little capital left to invest in Local Area Marketing. If you’re starting your first franchise, or expanding to more locations, Cashflow It provides equipment financing so that you can channel your capital into marketing and advertising, to help grow your business.

CFI Finance provides various financial solutions, so if you want to hold onto your capital to invest in Local Area Marketing, apply online now. 

How to become a Multi-Site Franchisee

By Rachel Kurzyp

Your first franchise is booming and you’re now looking to become a multi-site franchisee, but where do you find the capital to fund your second site? And how do you ensure you don’t miss opportunities to expand your franchise?


If you’re a successful franchisee looking to expand your brand by taking on another site, there are some preparations you must do before lenders will consider funding your future business. In terms of timing, it is important to have the first store running efficiently and profitably, according to CFI Finance Managing Director, James Scurr, as lenders will want evidence that you have a proven track record with your first store before taking on additional sites.

“Having an accountant prepare your financials to ensure they demonstrate a healthy profit will go a long way in securing funding for a second or third site”, says James. “This not only shows your ability to successfully run a business, but the profit derived from the existing store will help the lender assess the serviceability of the proposed lend on the second store”.

Often franchisees use all their available capital to fund their first store. This means they may miss out on opportunities to expand and become a multi-site franchisee. One way to ensure you can take advantage of opportunities when they become available is to have access to capital.

“At CFI Finance, we fund the fit-out and equipment costs for greenfield sites and we can also free up capital by funding the used equipment in the original store”, explains James. “We can also assist you by offering a sale and lease back of the original equipment to help free up important capital”.

Another viable option for franchisees is to have their franchise system accredited. “We have an accreditation program for franchise brands where franchisees are “pre-approved” for funding”, says James. “This approval is based on a per-store basis rather than per individual. So, a franchisee can have guaranteed access to funding multiple stores simply by completing an application form and providing a copy of their driver’s license”.

One of the benefits of using a specialised financial lender like CFI Finance is that many finance products offered are 100 percent tax deductible and are ‘off balance sheet’. “This is different from many other lender products where only the interest portion of the repayments can be considered a tax deduction”, explains James.

“The idea of multi-site ownership is that revenue and profit increase, which also means that the amount of tax paid also increases. But by funding your assets with CFI Finance, you can reduce the amount of tax paid”. The same goes for using funding ‘off balance sheet’. “By not displaying the finance on your balance sheet, franchisees will still have the ability to borrow from lenders”, says James.

Read more at www.franchisebuyer.com.au