Is Franchising Contributing to the Great Resignation?

It’s hard to believe that less than two years ago, most of us never heard of, or at least rarely used, terms like viral load, social distancing, and personal protective equipment. Yet here we are. And in the last several weeks, a new pandemic-related phrase has surfaced – The Great Resignation. This phrase is used to describe the number of workers who have resigned during the pandemic. The U.S. Bureau of Labor Statistics recently announced that 4.27 million Americans, or 2.9% of the entire workforce, quit their jobs in August. Add this to 4 million in July; 3.87 million in June; 3.6 million in May; and close to 4 million in April; and, as the saying goes, pretty soon we’re talking about real numbers.

Most of those workers aren’t giving up; they’re looking for something better. For many, purchasing a franchise may be the answer. In fact, a recent study of why workers leave supports this.

Digital.com recently conducted a survey and reported that 1/3 of workers quitting their jobs are interested in starting their own business. https://digital.com/why-are-workers-quitting-1-3-are-starting-their-own-businesses/ ?Of those, approximately 60% said they wanted to be their own boss and find something they are passionate about – this is the mantra of many a franchisee.?And while not all of these will be buying a franchise, the recent upswing in franchise sales would indicate that a good portion of them are.

Looking at this chart on new business formations since 2008, one readily can see what is happening.?Unlike the period following The Great Recession, the Post-Pandemic new business boom has seen a literal doubling of new business formation (with the exception of the 2020 holiday season).?

Some workers are finding they are in a better financial situation because of all the safety measures the government put in place so they can walk away from their jobs with more confidence. And many have larger nest eggs as both the stock and housing markets have boomed.??Now, with government assistance slowing or stopping, these resigning employees are going to need to take action (whether it be getting a new job, starting their own business, or buying a franchise). Purchasing a franchise is the solution for many who want to be in business for themselves while at the same time enjoying the benefits of an established system of operations, training, and a faster ramp-up than they would be able to accomplish on their own. And, of course, they get to be their own boss.

But companies looking to franchise their business and benefit from The Great Resignation need to move quickly to develop their franchise programs, as the start-up time for a new franchisor can take 4 – 6 months, or perhaps longer depending on whether franchises will be sold in registration states. ??While it is hard to say how long this will last, those who act fast will be able to take advantage of a sea change never before witnessed in this country.?