Millennials turn to franchises for fast starts
Today’s young people invest ‘sweaty equity’ in their future
Millennials with an entrepreneurial bent are choosing franchises as an opportunity to learn the fundamentals of business without having to reinvent the wheel.
Jose Miguel Aguila was just 24 when he opened his first Booster Juice location in a Toronto suburb as a franchisee. Now 27, he own three locations across the Greater Toronto Area.
Aguila said he wanted to put his accounting degree to work and get a taste of the business world with a proven concept.
“You’ve got sales from Day 1,” he said.
Aguila said his family and friends, especially his fellow students in the normally conservative world of accounting, were surprised he was taking such a big risk when he first announced his intention to buy a franchise.
He funded the $250,000 in startup costs for his first outlet with a bank loan, which he says took a lot of convincing despite his solid business plan.
“It was a very easy road for me to become an accountant with a good salary and job security,” he said. “But I chose to do something that would give me a little bit more freedom and the opportunity to multiply my income.”
Lorraine McLachlan, president of the Canadian Franchise Association, said entrepreneurial role models like Mark Zuckerberg give millennials more confidence in taking the first step.
“They see opportunities that their parents or generation X might not have realized were there, and they’re less afraid to try to go ahead,” she said.
One of the hardest things for many entrepreneurs of any age is coming up with a great idea or product, she said, and buying into an existing idea can be much simpler.
“It provides a blueprint for the business,” she said.
The franchise industry — including fast-food purveyors such as Tim Hortons and McDonald’s, as well as other retail services like ReMax and H&R Block — gives a $68-billion-a-year injection to the Canadian economy, according to the CFA.
Lawyer Tony Wilson, who wrote a book on buying a franchise in Canada, said investing “sweat equity” in a franchise business can be an alternative for young graduates facing a tough job market.
“To some extent, you’re buying yourself a job,” he said.
But Wilson sounded a word of caution to millennials pondering entering the franchising world.
He noted they’re known for being out-of-the-box thinkers, and he cautioned that strong-willed young people with ideas of radical change may find the traditional business model dictated by a franchise agreement too binding.