Are franchisors making the most of the opportunities to attract the 24 to 35 year old generation?

Beth Pocklington, CEO of Toddler Kindy Gymbaroo, and Mike McCarthy, director and CEO of real estate network Barry Plant, share tips on how to successfully recruit millennial franchisees.

1. Digital engagement is crucial

“Recruting millennial franchisees is absolutely via social media and digital engagement,” says Beth Pocklington. “In their immediate world they want immediate information. Investing in intelligent, and most importantly targeted digital campaigns that look and feel fresh and vibrant is paramount.”

2. Respond swiftly

Mike McCarthy says “With the pace of ideas and change, we just have to be more responsive. If you’ve got high performers looking for opportunities you have to move quickly. The big element is there is a real impatience. We’ve got a lot of older directors who had to work 10 to 15 years and raise a lot of capital to get where they are; millennials are ready to move now and want to know ‘what are you going to do for me?’.”

3.  Show the value of the business model

Pocklington identifies a particular challenge facing franchisors: the millennial generation can access so much more information about running a small business, what to do and what not to do – that the value of the traditional franchisor is being diminished.

“You really have to be able to prove that the model works today, tomorrow and in 10 years – you have to be able to innovate constantly,” she suggests.

McCarthy says franchisors need to embrace flexibility, and that means looking at any sacred cows in the business. “We’ve had to think how we blend what we know works with this urgency that millennials have. There are different challenges so how do we respond so they can be successful?

4. Transform to a 21st century business

Pocklington believes the franchise sector needs to take action to transition into a truly modern business.

“I do believe that the millennial generation are bolder and more open to being business owners than other generations but the franchise industry hasn’t transformed itself into a 21st century business model.”

• Eliminate barriers to entry and exit and embrace quality over quantity when it comes to attracting millennial franchisees – don’t trap them.
• Have systems and processes – but keep them simple
• Use technology for everything so they can access what they need when they need it
• Outsource previously traditional franchisor roles (actually whole departments) to specialist companies/consultants so that the innovation never stops.

5.  Find creative solutions

A significant roadblock to recruiting millennial franchisees can be a lack of the necessary capital to purchase a franchise outright.

In real estate some business can be worth more than $1m or $2m, and McCarthy says franchisors need to think creatively. “Can you bring them into an equity share, or offer vendor funding? If we’re looking at a start-at operation, is there another way to get them up and running?

“We have a fairly established network and baby boomers in particular are looking to transition over time. A lot of their workforce are younger. We work on succession planning, building up management ability, then offering them part ownership of the business.”

It’s important that in a franchise network there are opportunities for young, successful employees to have a path to their own business ownership, says McCarthy.

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