Who Is the Ideal Executive Franchise Owner?

I write often about franchise fit: matching your experience, resources, and goals to the right franchise business. Finding your fit will help improve your odds of success as a franchise owner. Fortunately, the franchise industry is so diverse that just about everyone can find a match. If you’re specifically interested in executive franchising – full-time income for part-time work – I’ve got good news. That’s The Empowered Franchisee’s specialty. And based on our work with candidates, plus our experience as executive franchisees, we’ve developed a profile of the ideal executive franchise owner. Keep reading to see if you’re a fit.

Professional qualifications of the ideal executive franchise owner

Executive franchisees have that name because they function as an executive overseeing a business. Executive-model franchises are typically multi-unit operations, and like an executive leading a company or a division, the owner must hire and lead a team to keep things running. The owner also must have a head for strategy and an understanding of basic business finance (such as how to read a profit-and-loss statement).

For these reasons, the ideal executive franchise owner has worked for 10-20 years as a high-performing corporate executive. If you have that kind of experience, you’ll probably transition to franchise ownership relatively easily. You’ll find that your skills transfer well, and a lot of the work will be familiar to you: reviewing financials, managing and mentoring employees, and setting strategic goals.

Financial requirements for the ideal executive franchise owner

Because executive franchises are multi-unit businesses, they tend to cost more than owner-operator franchises. Franchisors typically don’t offer a volume discount for buying multiple units: if the franchise fee for a single unit is $50,000, three units will cost $150,000. Your startup costs may also be higher, since you will have to open multiple locations over a period of time. You’ll agree on the exact timeline with your franchisor, but the most common arrangement is one new unit every 12-18 months.

Though many franchisees do finance some of these costs, a large portion of the money needs to come from your own assets. I typically look for an executive franchise candidate to have a minimum net worth of $1 million. At least $250,000 should consist of liquid assets that you can tap into for your new business. If you are going to live off savings while growing your business to profitability, you’ll need money to cover your living expenses on top of that.

Goals for the ideal executive franchise owner

I believe in the power of goals. For many years, one of my favorite business sayings has been “What gets measured, gets done.” So if I’m trying to determine whether you’re an ideal executive franchise owner, I won’t just look at your résumé and your bank statement. I’ll also ask why you want to become an executive franchisee and what you hope to gain from the experience.

In my experience, you’ll be a good fit if your goals include:

• Mentoring people – you must want to lead your team well and help them develop their careers
• Building and growing – successful executive franchisees must be eager and able to add locations to their business
• A reasonable time horizon – you should expect to spend 3-5 years growing your business to its full size and profitability
• Engagement – the ideal executive franchisee wants freedom from a traditional job but has a healthy fear of boredom

What if you don’t fit the ideal?

All this being said, there’s always an exception to the rule. Not everyone is right for executive franchise ownership, but you don’t have to fit this profile perfectly to succeed. For instance, while corporate leadership experience is ideal, it’s not absolutely required (or a guarantee of success). The key is to have solid organizational leadership experience. For instance, military officers and nonprofit leaders also often make excellent executive franchise owners.

If you are missing some of the qualifications above but still want to become a franchise owner, book a call with me or my co-consultant Lauri. We can help you do a thorough self-assessment to determine if you have a good chance of success at executive franchising. I promise: we’ll be honest with you if we see that you’re not a good fit. And if a different type of franchise will work for you instead, we can help you find it.