Millennials Want to Buy Franchises, Yet Almost No One's Marketing to Them
The next great market of franchise buyers. Ready to get your share? Bet not.
By Dr. John P. Hayes
Almost three-quarters of the 80 million Millennials in the U.S. say they want to be entrepreneurs, and most of them are perfect candidates for buying franchises, but almost no one’s marketing to them.
Millennials want to buy franchises -- 15 percent of attendees at the 2015 International Franchise Expo were under the age of 30 -- and franchising makes perfect sense for them, based on their values and skillsets.
However, there’s little evidence of any marketing to Millennials by franchisors. Meanwhile, Millennials are investigating franchising from the sidelines, just waiting for the perfect franchise opportunity to discover them.
As one Millennial who works for a major franchise supplier explained, “We’re the next generation of business owners, but when it comes to franchising, we’re not discovering the information we need to know. It’s as though franchisors are not speaking to us. They don’t know how to find us, they don’t know how to hold our interest (admittedly, we have short attention spans), and they don’t know how to approach us without sounding like they want to sell us something.”
Given that description of the problem, is it any wonder franchisors, who are always selling, are not pursuing Millennials?
Part of the problem for franchisors is that not much is known about Millennials and franchising. Thanks to the U.S. Department of Commerce, we know that the Millennial generation is the largest in Western history. There are some 83 million Millennials between the ages of 17 and 37 in the U.S. The United Kingdom reports there are 15 million more in their countries.
Millennials are well educated, culturally diverse, and hard to please, especially when it comes to employers. They’re also (and they don’t deny this) entitled, lazy, and narcissistic.
Millennials are not looking for a job as much as they’re looking for a lifestyle. They like workplace versatility and flexibility, and they expect a strong work-life balance.
So why would they be attractive to franchisors?
Partly because, as Forbes has reported, 72 percent of them want to be their own boss. In addition, they are more optimistic and engaged than their parents and grandparents, including members of Gen X and the Baby Boomers.
How could any franchisor ignore this dynamic, positive-thinking generation?
Granted, many franchisors are well aware of the opportunities, and some are making plans to capitalize on them. Ray Titus, founder of United Franchise Group, with eight brands currently, reports, “At UFG, we see this (Millennial) market for future employees as well as franchisees. That's why we have established the Titus Franchising Center at Palm Beach Atlantic University. We will be mentoring, and teaching franchising in college. Because we are in 80 countries there will be opportunities for students to work and intern overseas. We also have an employee credit program where employees can earn their franchise fee 100 percent, through five years of service.”
Millennial Franchise Marketing 101
There are at least five good reasons why franchisors should embrace Millennials and bring them into their franchise networks as quickly as possible:
1. Millennials don’t think like everyone else. Rather than thinking outside the box, Millennials kick the box and create a new one. Now that may scare some franchisors, who are all about finding people to buy their franchises and operate them by following the franchisor’s prescribed systems. Millennials are creative -- another word that scares franchisors -- and they’re all about doing things differently, but better. They don’t want to destroy anything. They want to build a better box.
2. Millennials understand calculated risks. And that’s perfect for franchising!
3. Millennials want to make a difference. That’s why they often leave entry-level jobs -- they see that no one cares about the results of their work. A job, or a business, that doesn’t create social change doesn’t interest them much. Many franchise brands are already supporting good causes, and those efforts perfectly suit the Millennials.
4. No one knows social media better than Millennials. They pioneered social media, and now dominate it. Twitter, Facebook, Instagram, YouTube, and similar sites provide a playground for Millennials. This isn’t work for them. More so, they know how to get the best results from social media. They’ve spent their lives interacting with family, friends, teachers, preachers and businesses online.
5. Millennials want to be mentored. That’s music to a franchisor’s ears. Millennials, unlike many Baby Boomers and Gen Xers, actually want to listen and learn! They want expertise. They want leadership. They like teamwork. Millennials invite coaching and looking over their shoulders even before they commit to a franchise opportunity.
All five points considered, what's keeping franchisors from marketing to Millennials?
No one knows for sure, but based on research by Manta, an Ohio-based firm that assists small businesses, small business owners (including franchisors), don’t believe Millennials are buyers.
Buying a franchise is a costly proposition, and franchisors are no doubt leery that Millennials don’t have the money to invest.
But Millennials are also confident and enterprising. They can figure out problems, especially money problems. They also have the advantage of parents and other relatives, as well as friends, who can afford to invest with them, and would appreciate the opportunity. Money isn’t the primary obstacle for Millennials. The bigger problem is finding a business that suits their needs, and a franchisor they can trust. And the fastest way to build trust with Millennials is to know how to market to them, and most franchisors do not.
Millennials will not tolerate sales pitches, but that doesn’t mean they don’t want to be sold. They do want to buy franchises, but on their terms, and that’s a huge pill for the franchisor, who’s always been in control, to swallow. But franchisors that want to prosper, not to mention survive, must now develop savvy marketing plans to attract Millennials. Boilerplate marketing and PR is history.
Websites and blogs, and even email campaigns (remember those?) are all important to snag the interests of Millennials, if used correctly. Manta’s research discovered that Facebook is still the dominant choice for Millennial customers, followed by Linkedin, and yet, few franchisors use those platforms effectively, if at all.
It’s now time for franchisors to make some moves. Whether they endow university programs, as has UFG, or implement programs to help their Millennial employees become franchisees, franchisors at least need to change their traditional marketing plans to pursue Millennials.
The franchisors who step out early, and confidently, equipped with Millennial-expertise, will get the upper cut, and the bigger chunk of the marketplace.
At this point, franchising needs Millennials more than Millennials need franchising. But there are 60-million-plus prospective franchisees just waiting for franchisors to discover them.
Dr. John P. Hayes spends most of his time teaching Millennials at Gulf University for Science & Technology in Kuwait. He’s a 35-year franchise veteran who has served as a franchisor, a franchisee, and an advisor to franchise companies.