IN PricewaterhouseCoopers’ second edition of the Franchise Sector Indicator survey, franchisors highlighted finding suitable franchisee candidates, franchisee funding, volumes of enquiries and insufficient funding for marketing opportunities among their biggest issues.
Eighty per cent of franchisors surveyed said it was difficult to find suitable candidates, with the biggest conflict arising between the desirable and actual age of candidates.
Sixty-nine per cent of franchisors said they wanted franchisees between the age of 30 and 44, while only 42 per cent have franchisees with this as their average age.
This also explains why franchisee funding is an issue, with younger generations more unlikely to have the capital available to invest in a franchise; which helps to explain why franchisees are most commonly aged between 45 and 64.
Althought 62 per cent of franchisors have not adopted any initiatives to overcome the issues, some have introduced strategies such as franchisor funding, allowing partnerships and joint ventures and cadetship systems.
Others have introduced accredited education qualifications, partial store or unit ownership, providing profit or income guarantees and reducing the term of franchise ownership.
Commentary on the survey suggested introducing flexible arrangements would attract Gen Y, which should be their target if they want to bring the average age of franchisees down.
According to PwC, at the top of the list should be identifying what can be done to promote franchising as a diverse and rewarding career that is looking to attract and develop people with the desired business skills.
By increasing the number of multi-unit franchises to encourage expansion of the franchising network, and introducing alumni systems to encourage the engagement of young former employees with the franchise system, PwC said franchisors could begin to turn around the issues associated with high growth.
Emily Morgan