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Franchising’s Dilemma – How to Attract and Hold the Next Generation

 

The attitudes of Millennial and Gen Z young people towards work is the subject of much angst amongst employers, often describing the next generation as lacking motivation and demanding unreasonable benefits. Are such criticisms relevant to franchising and what should franchisors do to recruit the best upcoming franchisees?

 

As the pandemic that gripped the world for more than two years fades into the distance, it seems most things have returned to some sort of ‘normal’. But a closer look at social expectations, attitudes to work, economic pressures, business responsiveness to changing conditions reveal some not-unexpected, game-changing realities.

 

Much has been said and written about working from home, the rapid take-over of technology in our lives, cashless shopping, and so on, that it need not be repeated here. But there’s one emerging change that is not often talked about and it’s one that will shape the decades ahead profoundly. And for the franchise community, it’s one that will determine who will be attracted to buying a franchise business in the years ahead. 

 

The group of people perhaps most affected by the pandemic in terms of their future expectations are the young people who make up the Millennial and Gen Z cohorts. (Millennials: those born 1981 – 1996; Gen Z: those born 1997 onwards.)

 

These are the young adults who grew up and entered the workforce at a time of extreme stress, crushing uncertainty and with little or no reference or guidance as to what to expect from work, money, career, leisure and family – or at least little guidance that seemed relevant to many in these age groups. 

 

As a result, these young adults have often very different expectations and aspirations about what they want compared to previous generations, including their fellow colleagues who usually comprise the older Gen X and Boomers in the workplace and more generally in society. 

 

Millennials and Gen Z’s find themselves in a world of tech-centric work, labour shortages, social media influence, internet everything, and societal structures that their parents could not even imagine. 

 

For some older people, including employers and business owners, the attitudes shaped by the world on these young people could be dismissed as annoying, self-entitled, naïve, or even lazy. But this ignores the reality that the Millennial and Gen Z generation are the emerging powerhouse of the economy and indeed all aspects of life in our country and around the world.

 

Their attitudes are shaping social commentary (on social media, not radio and television), politics (look at the outcomes of the last few federal elections), activism on future problems (climate change and geopolitical conflicts), on business (the dramatic rise of online commerce with its dependence on ever-new technology), and the next big unknown, artificial intelligence (will it replace jobs or create them).

 

Franchised businesses whose business model relies on attracting new and more franchisees in order to grow, will do well to recognise and adapt to the expectations of this next generation of franchise business owners. After all, the pool of older franchise applicants is getting smaller every year!

 

To expand in the years ahead a franchised business must attract people who are ‘available’ and this means the next generation of young people as they move from employment to buying their first business – hopefully your franchised business.

 

So, what are the expectations of this emerging cohort of prospective franchisees? For the purposes of this article, let’s summarise these as being:

A strong desire for work-life balance. These young people see working insanely long hours as being detrimental to their mental health, physical well-being and their desire to pursue other dreams and aspirations – not just work, even if that work is a business that they own. 

Working smarter, not harder. Having grown up in a tech-centred world, this generation sees technology as not just for working faster and smarter, but as fundamentally how all things should be done. (Try telling a 25-year-old you only accept cash when they pull out their smart phone at your check-out register!)

A desire for recognition for things that they contribute to in the work and the business.  To insist that they just follow the systems without questioning anything or wanting to make improvements, is a good way to lose talented young people – or fail to recruit them in the first place. 

 

These key expectations are what franchisors will need to be mindful of as they shape their franchise offering to attract the next generation of franchisees. Remember, Millennials and Gen Z’s are by-and-large well-educated, talented, highly motivated (when offered opportunities that meet their expectations) and above all, will become the best asset your franchise network can acquire. This is because they have the energy and the motivation to drive your franchise into the future – something unlikely to happen for franchisors who think the future is just the past, repeated. 

 

The uncertainty, the paranoia, and the deep-felt stress and anxiety of the recent past and the ‘dangerous’ future ahead is shaping the next generation of young people in ways not seen before. Business managers, including those of franchise companies, who recognise these new and different concerns and adjust their business model accordingly will be those that will determine the business landscape of the future. 

 

As they say, the future belongs to the prepared. The next generation of prospective franchisees is waiting and watching. Is your franchise offering one that will attract and hold the best of these upcoming franchise owners? 

 

 

Roger Dickeson is an experienced franchising professional and has worked in the sector as a consultant, adviser and business planner for over 30 years. Roger’s specialty is business development for small to medium enterprises and as a strategist in the franchising, licensing and capital raising fields. As a regular writer and commentator on small business and franchising topics, Roger seeks to inform, educate and challenge ideas in the increasingly complex, but exciting and rewarding world of business franchising.