How to Transition to Franchise Ownership in Your 40s

When I first created The Empowered Franchisee, my candidates fit a certain profile. They were all corporate executives in their 50s or 60s, looking to stay engaged and continue building wealth in retirement. I still work with many people who fit that description. Lately, however, I’ve been fielding more and more inquiries from franchise candidates in their 40s. These individuals often ask, “Is this the right age for me to transition to franchise ownership?” My answer: “Absolutely!”

You can become a successful franchise owner at any age. In fact, the earlier you make the transition, the better. You just need to be prepared. If you’re in your 40s and considering franchise ownership, this guide is for you.

How do you know you’re ready for franchise ownership?

As a potential franchisee in your 40s, you first need to ask yourself if you’re ready to be an entrepreneur. At this stage, you won’t have as much experience under your belt as someone in their 50s or 60s. But that doesn’t mean you’re not equipped for success. A thorough self-assessment will help you identify your strengths and weaknesses, so you’ll know which kinds of franchises to focus on and which to avoid.

You should also do some research to understand the risks and benefits of business ownership. Because you’re considering entrepreneurship through franchising, you’re already on the right track. The franchise business system and owner network will both help ease the transition to franchise ownership. You’ll also get other support directly from the franchisor and can build your own support network to cushion yourself against risk.

Finally, you should know why you want to become a franchisee. Many of the younger candidates contacting me are nervous about layoffs or unhappy with advancement opportunities in their current jobs. They want to take more control of their future and work (and earn) to their full potential. Others are burned out on high-pressure careers and seeking a way to retire early or make full-time income with part-time work. Still others, with school-age children or elderly parents to care for, are seeking better work-life balance and more schedule flexibility. Whatever your own reasons, they’ll affect which franchises are the best fit for you.

How do you manage the finances?

Franchise candidates in their 50s or 60s are often empty-nesters. Forty-something candidates, however, usually still have financially dependent children. Even if that’s not your situation, you’ll probably have less cash in the bank than someone who’s near the end of their career. Both these factors may mean that you need to be more conservative financially than a 50- or 60-year-old candidate.

Don’t worry, though. You still have plenty of options:

Look for more affordable franchise options, such as regional brands (which often charge lower fees) or home-based franchises (which have lower overhead).

Consider borrowing to fund your startup costs. With 15-20 years to go until retirement, you may be a good candidate for a 401(k) loan. The Small Business Administration also backs low-cost loans for franchisees. Check with your financial planner to make sure you’re choosing wisely.

If you want to quit your day job now, look for a single-unit, owner-operator franchise. By working in your business full-time, you’ll get to profitability and a paycheck more quickly.

If you’re looking at franchising as a retirement option, run your franchise as a side hustle and become a multi-unit executive owner. Depending on your goals, you can grow your business to sell it and fund an early retirement, or it can be an ongoing source of wealth and engagement in your golden years.

So, who is the ideal candidate?

To sum up: if you want to transition to franchise ownership in your 40s, you should have a certain profile. Some kind of leadership experience is crucial. It doesn’t have to come from a corporate job. I know successful franchisees who first had careers as homemakers, teachers, pastors, nonprofit directors, and military officers. The key is to have experience managing or mentoring people, handling a budget, and getting things done.

You also need to have your finances in order. It’s OK not to have as much money in the bank as someone in their 50s or 60s, but you should have at least $50,000 in cash to invest (you can borrow more), plus additional savings or a second income to cushion your personal finances. You should also have a clear financial record with no foreclosures or bankruptcies, and a low debt-to-income ratio.

If you have a spouse, they should also be on board. Their buy-in is not only important for your support and success, but also for the franchise awarding process. Any franchisors you apply to will want to meet with your spouse and see that they are just as enthusiastic as you about this new experience.

Finally, you’ve got to be game for the adventure. The transition to franchise ownership has three stages: applying for a franchise, launching your business, and maintaining it. Each stage is exciting and rewarding but also requires time and hard work. In the first stage, you must be willing to research franchise options thoroughly and put your best foot forward during the awarding process. The second stage requires long hours and a heavy financial investment. It can be exhausting but also exhilarating – you’re finally your own boss! By the third stage, you’re in it for the long haul. That means troubleshooting and enduring through challenges but also reaping the rewards of all your work.

How can The Empowered Franchisee help?

The Empowered Franchisee is here for you through all of it. We can help you find the right franchise fit, advise you on how to launch successfully, and serve as a sounding board as you mature as a business owner. And we do it all for free! Book a call today with one of us to learn more about how we can help you make the smartest transition of your life.