Transitioning From Corporate Executive to Franchisee

A while back, I started a discussion on LinkedIn about whether or not transitioning corporate executives made good franchisees. Most responses came from individuals from within the franchise industry. Some, from outside the industry. Several responses were based upon actual experience while some were simply opinion.

For our readers' benefit I've listed below a handful of the responses which I feel provide a fair cross-reference of responses. In doing so, I've given credit for each response but only according to respondents' titles as identified through their LinkedIn profiles.

Guerrilla Marketing Coach, behavioral analyst, speaker, author, student of life

"Really interesting question. In my 'past life' I worked in franchising and my general observation is that while a franchise offers a great framework and tool-kit for someone starting a business, it does not guarantee success.

People who buy a franchise understanding that they will have to work (and hard) to grow a successful business, and who are committed to using the franchisors tools and resources, are likely to be quite successful. On the other hand, those who think that a franchise is going to be a 'magic pill' that allows them to prosper without putting effort into it are surely destined to something far less than success.

Anyone looking at a franchise should take their time, talk to other current (and former) franchisees, find out what is involved in order to succeed, and what may contribute to failure within that particular franchise. Then, each person has to look deep into themselves to understand if they are truly prepared to start a business..."

Franchise Information, Mentoring & Development Professional

"Interesting question, Paul. As I've thought about it, I don't think it's an easy question to answer. Or the answer would have to be fairly simple, such as Yes and No! (Not very helpful, I realize).

Maybe we could ask the question another way. How have franchisors succeeded when they awarded franchises to transitioning executives? . . . Puts a little different emphasis on it.

We sometimes look at franchise success as up to the franchisor - i.e. it's the franchisor's job to be sure franchisees succeed, and that includes transitioning executives. But of course we know that not all franchisees, including transitioning executives, are created equal. Some are better than others! People in transition may, in fact, not make very good decisions - they may panic and jump into a franchise too quickly and they don't do all the homework that's necessary or they don't at least ask all the right questions.

It would be interesting for franchisors to reveal how 'transitioning executives' have fared in the past, though that's probably asking a bit too much. Because again, even if the transitioning executives failed, it doesn't mean the franchise system is a bad one. Maybe the brand is not a right fit for a transitioning executive, but that's probably incorrect. Would that be like saying it's not right for left-handed people? I just don't think 'transitioning executive' matters. What matters is how well prepared the candidate is for franchising and whether or not the candidate picked a good franchise for him or her. Because we also know that all franchisors are not created equal, either. Some are better than others - and I bet there are some that could tell us 100% of the transitioning executives that joined them succeeded."

Director of Operating Systems at a National Foodservice Franchisor

"It depends…. There is a significant difference between being a corporate executive and a franchisee. As a corporate executive of a brand you have a wide and deep support system with interdepartmental experts that can solve problems or point you in the right direction with one phone call.

As a franchisee you are 'it', unless you buy into a multi-unit franchise that can afford a support system that can make up for the skills that you lack or for skills for which you lack experience (accounting, finance, legal, HR, workers comp., marketing, training, operations, etc., etc., etc.).

The corporate executives that I have seen succeed are those that had an entrepreneurial mindset or prior experience running a business and quickly understood that forming a support system (internal or external) was crucial. It is not that corporate executives don’t want to do the hard work, it’s just that they are not used to think at the level of detail that is necessary to be successful at each level and therefore, they may not be familiar with all of the intricacies of running a business.

Franchisees need to be generalists and not specialists. Corporate executives are usually very good at the role that they had in their corporate career. While they will understand the brand’s perspective and strategy better than the average franchisee, they would only make the best franchisees if they are able and willing to adapt quickly to the demands of being a small business owner."

Strategic Performance Oriented Franchise Executive

"I doubt there are reliable statistics to support an empirical conclusion to your question.

However, my opinion for what it's worth is that when people make decisions to become franchisees out of desperation to replace a job/income it can be problematic as opposed to someone who transitions from employment to self-employment on their own terms."

What do you think? Do transitioning executives make good franchisees?

I'd love to hear your thoughts and perspective on this topic, especially as franchising is once again realizing an influx of transitioning corporate executives explore franchising. A trend that is certain to continue as we face financial challenges and economic uncertainty.

Please feel free to post your comments in the appropriate section, message me on LinkedIn, or send an email to me at [email protected].

Have a great day. Make it happen. Make it count!