Franchise businesses are being purchased by parents as college graduation gifts for their children. I’ve heard of gifts like grad school, a new suit or a new brief case but a franchise business?! This is an interesting trend. Sure, there aren’t many job opportunities out there lately for young college grads….but getting mom and dad to buy the job opportunity is certainly a new way of doing things!
This path delivers a chance to learn by doing…and to learn a lot about: sales, marketing, customer service, managing inventory, managing staff, as well as entrepreneurship, general business skills and how to work real hard! Some parents are looking at this as a way to give their kids some control over their own destiny and a shot at the American dream. Since franchises already have established policies, marketing tools and brand recognition, it can be a leg up on starting something from scratch.
Owning a franchise business is not a risk-free endeavor however! One of my best friends bought and opened two popular ice cream franchises a few years back after speaking with successful franchisees and after having had success running another business. Amongst many other frustrations with the experience, he wound up losing a sizable 6-figure investment. His number one item of advice to potential franchisees: “Corporate franchisors want to open more stores. They’ll give you some guidance, but if they want a physical presence somewhere, they’ll push the opening of a new store and give you the permits to do it even if they’re not expecting you to succeed.” So be careful – it’s by no means a guaranteed success story!
Some great resources on franchise businesses to check out: Entrepreneur magazine and the franchise news journal BlueMauMau.org. Also be sure to read this great article in the Wall Street Journal by Sue Shellenbarger: “When the Folks Give You the Business”.