Franchising Is Important to Communities
Most of what we see written about franchising is focused on the experience of being a franchisee, mine included. But there is so much more benefit brought to cities, towns and communities across the country by these proven national brands than just making the life of the franchisee better.
We are currently in the midst of what may be the largest migration of talent from corporate America to local business ownership in history. Eventually it may even be on par with the move from small businesses, mostly farms, to factories and city jobs during the Industrial Revolution.
There are multiple causes for this shift, one is that technology has made doing business in large corporate structures very automated and efficient where there is not direct contact with a client or consumer.
The other is the social breakdown between employee and employer over the past 30 years. When I was in college, if a company laid off a thousand employees it would be on the front page of every newspaper nationwide. Today a layoff ten times that size may not even be on the front page of the regional news outlets where it happens. Public companies have become so dependent on the stock market as a way to set their value, gain access to capital and borrowing ability that they shrink staff size on a whim to improve the price of their stock. Losing your job is no longer an indication that you failed in some way.
The employee has returned the favor, since they no longer have a real sense of security, by not seeking raises and promotions from their superiors, but rather going to resume sites and LinkedIn to seek a new job doing what they want to do or improving their pay.
This breakdown of the unwritten contract between employee and employer, I feel, is the biggest reason we see for the exodus of top talent form corporate America to franchise ownership.
Franchise professionals and companies that can become franchises have responded aggressively by creating more opportunities for these talented folks to grow their empires. When I started in franchising there were likely under 1,000 known franchise brands. When I moved from operations to franchise development years ago there were about 1,200. But the exodus had not begun yet.
Over the past few years, I had been using an estimate of a little over 4,000 brands at some level of existence.
But it turns out that may be very short of the real number.
An investment fund with some very interesting AI-based search software recently ran a search for a count of franchise brands and came back with a number over 10,000. Now, I don’t know how accurate that list is, but it is safe to say that the franchise industry is responding to market demands and the human talent resources available.
So, that is the beginning of our story. Where does it go from there?
Well, when a corporate professional buys a franchise, they are voting with their financial resources to use a proven system as well as the people and infrastructure behind it. They are trying to ensure the best odds for success in their endeavor.
When they open their franchise, they are local business owners, just like the independent businesses in their market, only with the addition of the proven systems they employ.
Franchisees create jobs, hopefully many long-lasting jobs, and often times better pay and benefits are part of their plan. Franchisees seek diverse and capable employees that can help them grow their business. They give them training to move from whatever level they come into the business through supervisor, manager and multi-unit manager ranks. The industry has a long history of hourly employees working their way up to becoming franchise owners themselves.
These are local jobs, not offshore workers doing work for distant corporations.
Franchise owners tend to keep their profits in the communities they made them in. They don’t send them across the country to a corporate office or out of the country to shelter them. Franchise owners build their local economy, support local charities and activities, like local sports teams.
Franchises are one of the fastest growing sectors of that first job that introduces teens to working. The training and skills that can be picked up are valuable. There aren’t many other places where a teen can earn a responsible managerial role over a multi-million dollar business.
In an economy where large corporations are consolidating brands and eliminating jobs, franchising is a key to building our economy, workforce and providing sources of growth for communities across the country. It is an engine for job creation and advancement across all socioeconomic categories.
And you may have thought you were just securing your own future by becoming a franchise owner!
George Knauf is a highly sought after, trusted advisor to many of the top franchise ownership groups in the world. With over 25 years of experience in both start-up and mature business franchise operations he is uniquely qualified to advise individuals that have dreamed of Building their own empires. Whether you have an existing portfolio or searching for your first franchise, he can help you to pursue your dreams. Contact the Franchising USA Expert, George’s Hotline: 703-424-2980.