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Generation Y Not Now?
Franchising World, January 2007
Make way for the fresh faces of franchising. For many franchisees, the entrepreneurial spirit is an instinct that developed after many years in the workforce. The extent of their business experience gave them the confidence they needed to become their own boss. Others are born with it. These are the franchisees of Generation Y. Born between 1978 and 1989, Generation Y is the fastest-growing population in the workforce, representing 22 percent of the current workforce. By 2010, approximately 10 million more “Gen Yers” are expected to join the working world, outnumbering their predecessors, Generation X, and that’s not including immigration. These findings are according to a 2006 analysis conducted by RainmakerThinking, Inc., an organization that has administered ongoing studies of the working lives of young people since 1993. Tulgan added that the prominence of technology and changes in child rearing has attributed to the characteristics of Gen Yers. Today’s young workers walk in the door with more information in their heads and at their fingertips than ever before,” Tulgan said. “They’ll walk into your office and say ‘I’ve been to your Web site, and I already have 10 things that you can change.’ If you have a young, rising star [at your company], that person has walked around thinking they might buy the place.” And that’s where franchising comes in. "They have lots of entrepreneurial spirit,” Tulgan said of Gen Yers. “Wherever they’re working, they’re thinking like an entrepreneur, but they’re also thinking like a customer. One of the signature traits of Gen Y is that they want to do something on their own, but they won’t reinvent wheel. That’s been done. [Gen Yers think] ‘I’m a real innovator who wants to know all the tricks you’ve already got.’ I think a franchise opportunity would be a good fit. You’re in business for yourself but [the franchisor will] tell you how to do it.” According to Franchise Business Review’s 2006 industry-wide benchmark survey, 13 percent of franchisees are between the ages of 18 and 34, with 20 percent of respondents reporting that they had fewer than two years of business experience.
Too young? Maybe not. “I’m going to open at least two or three more Glass Doctors and build my own little enterprises,” says Alina Gutierrez of Glass Doctor. Those are the ambitious plans of this 26-year-old franchisee. “But I also want to branch off into something else,” she added. “I have a million business ideas in my head.” Gutierrez has always known she would open her own business. Even as she took a detour to franchising to serve in the National Guard, her career plans stayed intact. “I was raised on the idea of owning a business,” she said. “I knew I was going to own my own business my whole life. I was always inventing things.” Gutierrez served as a sergeant in the National Guard for a year-long mission in Iraq leading convoys from her post outside Baghdad to deliver money to U.S. military units. Upon completion, she eased back into civilian life by exploring different business opportunities. She realized that her military service wasn’t a detour at all. Thanks to the International Franchise Association’s VetFran program, she had earned a financial incentive to open a franchise. That’s when she found Glass Doctor, a concept of The Dwyer Group. “Glass Doctor talked about the benefits of owning a business and a glass company,” Gutierrez said. “They had systems in place. I would know how to run the business by following the systems.” Now that she’s in business for herself, Gutierrez has learned that being young gives her some distinct advantages. "I'm willing to take chances, and I’m new to the game so I’m really hungry and motivated, ready to learn everything I can,” Gutierrez said. “I’m constantly trying to learn the business and be smarter.” So until she opens her next operation, she plans to continue to learn everything she can to stay ahead of the game. That’s been the experience for Matt Godek, a 27-year-old franchisee with Senior Helpers. “It’s not about how old you are, it’s about how you come across,” says Godek. “You convince people that you know what you’re talking about by being very knowledgeable and very prepared,” he explained. Combining his childhood dream of being a doctor with his lifelong interest in business, Godek is the youngest franchisee in the Senior Helpers system. He was also born with the entrepreneurial spirit, and even though he dreamed of becoming a doctor, Godek recalled a specific childhood moment when he thought about going into business. “I can remember when I was in second grade, I was going to parochial school, and I noticed a corner lot with an abandoned building,” Godek said. “I had the idea of opening a store and making money. Business has always intrigued me. As a child, I would look at the stock pages. My parents weren’t business people, but that’s just how things happened for me.” Godek pursued a career in the medical field by becoming a certified nursing aide, but began looking at ways to pursue a business of his own. “I went online and started searching for ideas, home healthcare businesses. I e-mailed Senior Helpers and got a call back. When I asked my father-in-law for some business advice, we booked a flight to talk to the CEO of Senior Helpers. I was drawn to franchising because somebody had already perfected something. It takes money to develop ideas. Why reinvent the wheel? The support I get from the franchisor is amazing. There’s always someone there to help you out. It’s a great opportunity to learn business and help people.” As for becoming a doctor, Godek said he still plans to follow through someday.
Getting His Slice of the Pie His first exposure to FastSigns came when he was a college student working part-time in production at his cousin’s franchise. Upon graduating from college, Junkin became a successful business-to-business salesman, closing on some significant $300,000 and $500,000 sales deals. But even as he sold everything from radio advertising to banking equipment, his work felt unfulfilling. “I wasn’t getting my slice of the pie,” Junkin said. “It didn’t fit well for me. I was helping someone else make all the money. I always thought about being my own boss. I kept telling my wife that I hated my job and that I wanted to start my own company. She asked me what my favorite job was, and I told her that it was making signs. That’s what I wanted to do.” And in October 2006, what began as a summer job between semesters has become a career. For a shop where business thrives on the latest and greatest in technology, Junkin’s customers see his age as a contributing factor to his knowledge. “Other franchisees are always telling us that they wish they were our age when they started,” says Ben Foltz of HomeVestors of America. That’s how Foltz described the perception that his fellow HomeVestors of America franchisees have of the four Gen Y partners who met in a Georgia Tech fraternity house and today own their own franchise. For Ian Carlton, Justin Landis, Hap Richardson and Foltz, all ranging in age from 25 to 28, being fraternity brothers turned into becoming roommates. And being roommates turned into becoming business partners. After a brief post-graduation separation, the pals rejoined to dabble in real estate investing. After a year and a half of part-time investing, they decided to make it a career. Purchasing the last franchise available in Atlanta, they established Round Here Ventures in early 2005. “We decided to go with HomeVestors because we wanted to join a big, legitimate real estate company,” said Foltz. “HomeVestors is a very well-known and reputable brand. We wanted to share their creditability.” For the four partners, HomeVestors was the franchise choice that best matched their career expectations. "The thing that led us to HomeVestors is that you chart your own course,” Foltz said. “It has the benefits of a franchise, but you’re independently-owned and operated. You have a lot personal freedom.” Foltz and his partners are working hard to protect their franchise investment for the long term. “We try really hard. There are other franchisees who have made a lot of money, and for them, this is a hobby, but for us, this is it. We’ll be doing this for a while,” Foltz added. Jason Killough, director of franchise development for HomeVestors of America, a franchise with 18 percent of its franchisees between the ages of 25 and 34, said youth can be a good thing in the business. “Some of our top franchisees are in their 20s,” Killough said. “Their youth and energy are a nice advantage, but they also tend to have fewer pre-conceived ideas about the business. They’re not as set in their ways. The key to success in franchising is being able to follow a system.” The Dwyer Group, the parent company of Glass Doctor and five other franchise companies, counts 14 franchisees who are in their 20s among their brands. And the company has learned from franchisees like Gutierrez that they have a stronger desire to stick to the system. “Younger franchisees realize they don’t know everything they need to know yet, and they are more willing to follow the system,” said Mike Bidwell, CFE, chief operating officer for The Dwyer Group. “Younger franchisees have more energy and enthusiasm. They crave new technology and are willing to learn. I believe the success rate is the same as older people.” At the rate with which this population of young adults is growing, a new prospect is presented every day. Franchise systems can make their concepts more appealing to Generation Y by marketing their solutions to the disadvantages a young professional has in starting one’s own business. Gutierrez suggests bringing attention to the benefits of opening a franchise early in life and showing prospects that small-business owners can still have a well-rounded life. Godek advised franchise systems to market their financing options. Many Gen Y prospects are equipped with “angel investors” or family resources. Others are not. Junkin agreed with this point, and said, “It’s all about the funding. No one wants to be in debt $100,000.” By appealing to the specific needs and the unique characteristics of Generation Y, a franchise company can establish a base of life-long, possibly multi-unit, franchisees. Jacy Cochran is an account executive for BizCom Associates. She can be reached at jacy@bizcompr.com.
Bruce Tulgan, founder of RainmakerThinking, summarized the business characteristics of the emerging generation.“They are the most high-maintenance workforce in the history of the world, but they are also the highest-performing,” Tulgan said. “They have such high expectations, but what we’ve learned, is that they have high expectations of themselves. They want to hit the ground running, identify problems that no one’s thought of before. This is a generation of people who are willing to prove themselves to themselves and their bosses. They are willing to do the grunt work very well and very fast. They are willing to prove themselves by doing all different kinds of work. The big catch is that they are not willing to work very well, very fast, all day long for vague rewards.”
Some franchise firms have disqualified this segment of the population for being too young, inexperienced and lacking the financial resources. However, success stories abound in franchise networks that disprove this reasoning.
“My customers look at me and see someone who is in touch with the latest technology,” says FastSigns franchisee Chris Junkin. The 29-year-old franchise business owner added, “If my product is newer and fresher than what’s been around for years, then that’s an advantage that I have.”
