Some franchise owners have always been self-employed. People with this background may have owned a series of franchises, or they may have worked as traditional entrepreneurs before becoming franchisees. The candidates Lauri and I work with at The Empowered Franchisee, however, are usually long-time corporate executives or top-level managers. They want to become franchise owners to gain more professional and financial freedom, but they’re often unsure how to transition from corporate employment to franchise ownership.
Part of my role is to help them figure out the best transition process for their specific situation. The details vary for everyone, but generally speaking, I’ve found that the most effective transition options fall into one of three categories.
Transition to Franchise Ownership: the Two-Stage Approach
One option is to follow a two-stage approach to the transition process. This option tends to be the most popular with Empowered Franchisee candidates. You start by running your franchise as a side hustle. Once the business is running smoothly, you can retire from your corporate gig while continuing as an executive franchise owner.
This approach has a key advantage: it provides you with a salary and health insurance while your business is still in the launch phase. You can pay your bills from your corporate paycheck until the franchise is profitable and yielding some kind of salary, or until you’re ready to draw from your retirement account or pension (ask yourself these questions to know if you’re ready to take that step). It also sets you up to remain active and engaged after you’ve stopped working full-time.
The main disadvantage of this approach is the workload. Having done it myself, I’ll admit that juggling a corporate job with a franchise launch is a lot of work. But for an experienced executive, it’s manageable – similar to taking on a special assignment from the CEO.
Transition to Franchise Ownership: the Parallel Approach
A smaller but significant portion of our candidates want to transition to franchise ownership well before they’re ready to retire. They plan to run a franchise in parallel to their corporate job for as many as 10 years or even longer.
This approach is usually only manageable if your franchise places a very low demand on your time. You’ll need to find just the right kind of executive franchise – possibly a turnkey option – to make it work. And you’ll need to build a good team very quickly, to avoid spending long hours handling day-to-day issues.
I usually recommend this approach if you’re interested in a franchise as a large, appreciable asset, rather than as a source of day-to-day income. Once the business reaches profitability, you can either use the profits for personal purposes (e.g., paying a child’s college tuition) or roll them back into the business to make it grow. When you’re ready to cash in, you can sell your franchise for a large lump sum. Or you can leave the business to your heirs as part of your financial legacy.
Transition to Franchise Ownership: the Cold-Turkey Approach
Candidates who have a choice usually opt for the two-stage or parallel approach. But especially in recent months, I’ve been hearing more from candidates who’ve been laid off (or see a layoff coming their way), are burned out, or are working in dying industries. If you’re in a similar situation, you may not have control over how quickly you have to switch to a new path–in effect, you may have to quit the corporate world “cold turkey.”
It’s normal to feel stressed under that kind of circumstance, but don’t worry: you can still succeed in the transition. I can help you find the right franchise fit as quickly as possible, to minimize the time you’re out of work. You can then work full-time on your franchise launch as an owner-operator. If you’re interested in executive ownership, you can transition to it later, once your business is running smoothly. With this approach, you can launch and grow your business more quickly. And of course, the sooner your franchise gets off the ground, the sooner it’s likely to be successful.
Some franchises are better suited to one of these options than to the others. But that’s the beauty of franchising: it’s almost infinitely flexible. Whether you want to work from home or in a brick-and-mortar location, be an owner-operator or executive owner, or dive into just about any industry imaginable, there’s probably a franchise to fit your preference. Want to learn more about how franchising can give you the professional and financial flexibility you’ve always wanted? Let’s chat! My services are always free, and I can help you determine what kind of franchise is right for you.
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