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It’s your generation

Sarah Stowe

“The oldest Gen-Ys are now 30 years old,” says Ian Krawitz, head of intelligence at 10 Thousand Feet. “In the franchising landscape Gen-Ys have largely been ignored up until now due to being too young to have built up capital required to invest or being seen as having a phobia of commitment. When you consider that one of the traditional sources of new franchisees who are likely to be hard working is the 30 to 34 year old age group, franchisors are starting to see the importance of Gen-Y and starting to change their mindsets.”

Encouragingly the latest 10 Thousand Feet study shows signs of progress in franchise systems overall: 17 percent of franchisors report a tailored strategy to recruit Generation Y against just 11 percent a year ago.

The latest PwC Franchise Sector Indicator suggests this overlooked area is one of the challenges facing the industry.

“Franchisors have told us they are not yet focused on specifically attracting this demographic, so perhaps it is time to consider strategies such as reaching out to those who worked in franchises in their youth, who may have some understanding of the sector and may be looking for a career challenge,” the report suggests.

The Indicator found that among established franchises of more than 20 units, there appears to be a mismatch between the desired and real age of franchisees: 30 to 44 year olds are the ideal franchisees for 69 percent of these franchisors, but only 42 percent actually have an average franchisee age in this bracket.

“We know that Generation Y has a different attitude to life than generation X and the Baby Boomers. Franchisors must consider Generation YÕs needs and outlook on life to ensure the long term sustainability of their franchise models,” the report reads.

It also offers some suggestions for ways to address the Gen-Y market more effectively. Says Greg Hodson, national lead partner, franchising at PwC, “This could involve initiatives such as an alumni program for young people who worked at franchises during their schooling years. Such a program could deliver targeted continued contact as the progress through their careers and provide awareness of opportunities to return to the franchise system as a franchisee.”

The report also suggests franchisors need to address the most pertinent issues in recruiting younger franchisees, and consider alternative methods for funding. They should also think about structuring their franchise systems to suit.