A Franchise May Be Right For An Unemployed Older Worker

As folks 45 and older face the stark realities of losing their jobs and struggling to find positions within the conventional workforce — a dearth of opportunity often the result of ageism fueled by stereotypes — a new career choice is emerging: franchise owner.
The 21st century workforce has forced middle-aged workers to confront certain realities (for example, downsizings often hit older employees disproportionately), and they are getting more comfortable with the thought of changing careers, starting their own businesses and accepting lower-paying jobs within their respective fields. Within this framework is the franchisee option.
The thinking goes something like this: “If a prospective employer doesn’t want to hire me because I’m perceived as on the downward slope of my career, not particularly tech-savvy and/or in need of a maximum salary, I will start my own business. And doing so as a franchisee presents a certain safety net.”
“When I see someone who is 10 to 15 years from retirement, I’m looking at someone who has a lot to contribute and who wants to work,” said Jennifer Goodrich, owner of a Crestcom business consulting franchise in Tennessee (with an office in Brentwood). “Why is a franchise particularly good for someone older than 45? It has limited risk and requires business acumen and a good work ethic.”
Ann H. Franke, president of Washington D.C.-based Wise Results LLC, said age discrimination is a “significant issue.” In response, many workers 45 and older simply opt to start their own businesses, franchised or not.
“Sometimes older workers look to set up their own businesses,” said Franke, whose company works with educational institutions (among other organizations) on various workforce policy and risk management issues.
“[Ageism] often lurks under the immediate consciousness of organizational leaders and the media,” Franke said. “We have deeply ingrained stereotypes about the aging process. People don’t realize that we don’t all age at the same rate.”
Dan Aronoff, an adjunct professor at the Jack C. Massey Graduate School of Business at Belmont University, teaches a class on franchise management. He notes how increasingly common the trend of those 45 and older opting for franchise entrepreneurship has become in the past few years.
Aronoff said that for most people, “franchise” conjures images of burgers and pizza. The reality, he said, is that many franchising businesses are not related to fast food. Another common misconception, he said, is that exorbitant capital is needed to invest in a franchise. In fact, there are many franchise opportunities in the $50,000 to $100,000 range.
“Some have spent the lion’s share of their career in corporate America,” he said of older workers looking to be franchisees. “They’re not looking to create something on their own. They’re looking for a framework and structure. Not having anybody to turn to for advice is difficult. If you’ve never owned a business, you’re used to that structure. Give me that formula, that recipe for success. That’s what they’re looking for. You’ve got to be willing to work within that system.”
Self-employment, whether as a franchisee or sole proprietorship, is becoming a reality — or, at least, a major consideration — for older workers who get downsized. The bottom line for many is that finding a job within the conventional workforce and in their respective chosen fields is challenging at the least, and brutally difficult at the worst.
According to a study the Heldrich Center for Workforce Development at Rutgers University conducted from August 2009 to August 2011, 80 percent of unemployed people 50 and older had been looking for a job more than one year, including about 50 percent who had been looking for more than two years. More were pessimistic than optimistic (by a margin of about two to one) about finding jobs in the near future, while more than 60 percent of those older than 50 believe they will never work full-time jobs within their fields of expertise. About 82 percent reported stress of some type, including sleep difficulties and family strains.
Aronoff estimated one-third to one-half of his clients don’t feel confident they can find the type jobs that will pay an adequate salary and provide the necessary responsibility and challenge.
“Something I hear a lot of is, ‘This is the third or fourth time I’ve been downsized, and I’m tired of it,’ ” he said, adding folks want more control than can otherwise be found in the potentially volatile conventional workforce.
Various franchise opportunities exist, Aronoff said, in service-oriented businesses that don’t require expensive and extensive bricks-and-mortar settings. Franchisees can find success in business-to-business, education, senior care and, of course, food and beverage businesses.
Another option for older displaced workers ready to re-enter the workforce is to find those companies willing to hire people in their 50s and 60s.
Mark Hill, president and owner of Berry Hill-based Tandem Realty, employs eight people, five of them 50 or older.
Interestingly, Tandem’s nontraditional demographic unfolded by circumstance — and not design. And Hill, 32, is quite pleased.
“They have experience I can draw upon to help me not repeat mistakes they may have made,” he said. I use them as a way to counterbalance my age. When you’re only 32, people tend to look at you [with more skepticism than otherwise]. The older employees bring some perceived stability to the company.”
“One gentleman who works for me owned a plastics company,” Hill said. “He has an engineering background and is good at technical details. Another gentleman has a background as a road manager for bands. He can manage different things simultaneously.”
Hill said his older employees offer life experiences that help ensure the Tandem Realty team “maintains a home life so that we don’t lose perspective.”
“I have seen them take more pride in their work than I have seen in some of my employees who were younger and no longer with us,” Hill said. “Older employees will own up to their mistakes a lot faster [than younger workers]. I have perceived a lot of entitlement in some of the younger generation. That’s why I’ve enjoyed working with the older people.”
But for every Mark Hill, there likely are at least three employers who prefer younger workers, who bring a perception of tech savvy, hunger and willingness to work for a modest salary in exchange for a change to climb the career ladder.
With that reality as a backdrop, Goodrich, the Crestcom franchisee, said unemployed older workers looking to rejoin the workforce in any manner must be prepared to face stereotypes.
Age discrimination, she said, carries three often inaccurate or exaggerated presumptions: Older workers are not computer savvy; older workers’ medical bills will exceed those of, say, healthy younger employees; older workers could retire in five to 10 years and thus might coast on the job.
“But I have found in my experience,” Goodrich said, “that your over-50 worker is diligent, has a phenomenal work ethic and is passionate about making a difference and an impact.”
Goodrich, 47, speaks from experiences. She was laid off a few years ago — the recipient, she believes, of subtle age discrimination.
After a brief period looking for a job within the conventional workplace, Goodrich decided to be a Crestcom franchisee. She now has four part-time employees, and through her introductions, Crestcom (which markets and delivers training in sales, recruiting, customer service and management) has sold franchises to four individuals, each one 45 or older.
“Franchises take a lot of question marks out of the equation,” she said.
But there can be major concerns as part of that equation, too. According to the Associated Press, startup costs may range from $20,000 to $150,000 to buy part-time or smaller franchises. There are royalties, licensing requirements, long-term commitments and the franchise company’s ultimate control to consider.
Aronoff said franchisees must make sure they have sufficient funds to not only invest in their businesses but ride out the break-even periods.
“You’ve got to have money to live on,” he said. “You don’t want to stretch yourself too much. That is a big mistake a lot of people make. They get in over their head. You’ve got to go into it knowing it will take time to build. A lot of people want to go into it on a part-time basis, but that typically won’t work. You have to temper expectations.”
Regardless, Goodrich is sold on franchising. She booked her first $10,000 in sales by the end of her first month as a Crestcom franchisee and saw gross invoice sales of nearly $500,000 by the end of her first year.
The franchise model is successful, she said, because it has evolved beyond the awkwardness of the start-up model, bypassing a business phase of trial and error that usually consumes vast amounts of time and cash before profits are even a possibility.
“The franchise model increases the chances for the success of the business,” she said.
By Lee Thomas
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