Phil Castle, The Business Times
Stacy Swift believes franchises offer opportunities for a growing number of older Americans going into business for themselves.
With a proven concept and system, franchises usually pose less risk than independent startups, Swift said. Moreover, franchises provide operational and managerial support to the owners who run them. “You’re in business for yourself, but not by yourself,” she said.
It’s a distinction Swift knows from personal experience. After running an independent deli and catering business, Swift has operated over the course of her career two franchise hair salons and a three handyman franchises. For more than a decade, she’s run yet another franchise operation offering franchise brokerage services.
Swift owns the FranNet franchise for Colorado, Montana, Utah and Wyoming. Working out of an office in Denver, Swift matches the interests, skills and financial means of prospective owners with franchise businesses. FranNet represents more than 100 franchises in a wide range of industry sectors, she said.
While Swift said she specializes in helping people start new franchise operations, she also works with those interested in purchasing existing businesses.
Swift provides consulting services and leads seminars for free. She earns money from referral fees and sales commissions.
Swift said many of the prospective owners with which she works are older people looking for a change from corporate careers.
While people used to work for one employer and retire, the 40 years and a gold watch rule of thumb no longer applies, she said. Even as corporations have reduced the size of their operations and staffs in recent years, the average tenure for corporate employees has substantially shortened.
Studies confirm recent trends. The Kaufman Foundation reported the share of businesses started by people aged 55 to 64 was 23 percent in 2012 — higher than the rate for those in the 20- to 34-year-old age range. AARP reported that people over 50 comprise 40 percent of the self-employed work force. Among the self-employed, more than 30 percent made the transition after the age of 50.
Swift said true entrepreneurs don’t necessarily make good franchise owners. True entrepreneurs typically want to start their own businesses, call the shots and succeed or fail on their own merits.
Franchise owners would rather pursue a proven concept than invent a new one, Swift said. And the best franchise owners of all tend to be team players willing to follow a system and listen to others, she added.
Given a track record of success as well as support for owners, franchise operations usually pose less risk than independent ventures started from scratch, Swift said. According to statistics from FranNet,
91 percent of new businesses the franchise helped start remained open after two years and 85 percent were still in operation after five years. According to the U.S. Census Bureau, 64 percent of small business startups remain open after two years and 50 percent continue in operation after five years.
The outlook for franchise operations in the United States in 2014 has improved along with expectations for economic growth, home sales and consumer spending. According to a forecast prepared for the International Franchise Association, the number of franchise operations in the U.S. is expected to grow 1.7 percent even as franchise payrolls increase 2.3 percent. The output of franchises is forecast to increase 4.7 percent.
Swift started her first venture — an ice cream and frozen yogurt outlet that evolved into a delicatessen and catering business — in downtown Denver in 1989. Although she sold the operation for a profit six years later, Swift said she learned “the hard way” about the challenges and sacrifices of running an independent operation.
Swift said she discovered she was happier running franchise businesses, including two Fantastic Sams hair salons and three Mr. Handyman franchises. She said she realized she could use the same skills in marketing her businesses, managing employees and assuring customer satisfaction without having to actually cut hair or fix garbage disposals.
Swift now counsels people on buying their own franchise businesses.
FranNet offers a proprietary system that helps match a prospective owner’s skills and interests with certain types of franchises, she said.
Regardless of exactly what business constitutes the best fit, though, Swift said franchises offer opportunities for people who want to go into business for themselves, but not by themselves.
For more information about franchising opportunities offered through FranNet, visit the website at www.frannet.com.