Graduates can broaden their career prospects by setting up their own business - and a franchise is a proven way to do it
The number of young entrepreneurs is growing. 2020 saw a 15 per cent increase in the number of young people starting their own businesses over 2019, research by government business initiative Innovate UK shows.
However, too few young entrepreneurs know about the franchising route into business ownership.
Here’s how it works: the franchisor (the company that runs the franchise) sells you (the franchisee) the right to run your own outlet using its brand, proven business model and operations techniques.
Becoming a franchisee involves an investment, but it can be a faster, less risky way into business. Most business degrees do not provide much information about the franchise model, but more young people are investing in franchises. At least one in five new franchisees is under 30, according to the British Franchise Association.
Franchisors welcome graduates
Franchisors welcome applications from suitable graduates.
Julie Waites, consultant and recruitment specialist with The Franchise Company, says: “I would definitely recommend franchising as a route into business for graduates, as it’s a good way to start in business without any previous business management experience.”
Worldwide express courier service provider InXpress offers a ‘Young Guns’ franchise package aimed at graduates with business degrees. InXpress global CEO Mark Taylor says: “When I was 20 and about to graduate, I didn’t want to work for some corporate organisation, becoming a slave to the 9-5 for someone else’s benefit.
“I was introduced to franchising as a way to make the most of my life while making a difference in others. This is what we offer graduates through the Young Guns programme.”
Graduates who pass suitability screening are offered three months of paid work with an existing franchisee, so they can learn the business from the inside and then if they continue to meet the InXpress criteria, are offered a franchise at half the normal price.
Neil Randall, UK chief executive of gym franchise Anytime Fitness, says: “A key future objective for us is to work closely with universities, business schools and personal training qualification providers to support and encourage more young people into franchising and help inspire them to become business owners.
“Graduates’ skill sets and high levels of enthusiasm lend themselves to running their own health club.”
At toddler football franchise BabyBallers, business development director Chris Elms says: “With many graduates struggling to find employment at the moment, franchising can be a good alternative to starting a business on your own.
“We provide unlimited support and training to those who have the right talent, ambition and passion.”
Why a franchise could be a better way into business for graduates
• Franchisors do not expect you to have experience in their sector, which gets you out of the ‘no job, no experience, no job’ trap. You don’t need prior experience because franchisors offer the training and support to start and run your business.
• You don’t need an upper second or a first to stand a chance of getting on board, unlike many employers’ graduate schemes.
A degree in business, accountancy or some other subject relevant to a franchisor’s sector may help, but other subjects are fine.
Rather than a degree, franchisors look for people who are enthusiastic about their business sector, are willing to learn new skills and work hard.
A CV with evidence of delivering high-quality customer service, working under pressure, managing your time, teamwork, sales and problem solving, gained in the workplace, will help convince franchisors you have skills to be a franchisee.
• You may already know more about franchising than you think. Many students have worked in franchised businesses, perhaps delivering pizzas, providing domiciliary care or serving in a fast-food restaurant.
If your current or past employer is a franchised business, ask your boss about how the model works.
Graduate jobs falling
• The number of graduate jobs dropped by 12 per cent in 2020, with the majority of employers anticipating further decline next year, according to the Institute of Student Employers.
• In 2020, employers received 14 per cent more applications for graduate roles and nine per cent more for internships and placements.
Learn more about franchising
The British Franchise Association and Lloyds Bank created the Leaders of Tomorrow guide to highlight to younger people the possibility of careers in franchising.
You can download it here: thebfa.org/the-leaders-oftomorrow.
Consider taking the Prospect Franchisee Certificate course. It will help convince franchisors you are serious. It’s free online at bfa. trainme.tv
Working for a franchise can help you become a franchisee
“Starting as a franchise frontline worker is a well-trodden path to becoming a franchisee,” says Simon Mills of franchise consultancy Franchise Focus, who also recruits franchisees for clients such as the Christies Care home care franchise.
“Many super-successful franchisees in all sectors started out working on the franchise frontline,” Simon says.
“Experience working for a franchise will give you the edge when you apply to become a franchisee, either with the same franchise or another.
“One of the things Christies looks for in prospective franchisees is care sector experience.
“Working in a franchise means you learn how the franchise model works and what life is like for the employees, which helps make you a good team leader when you become a franchisee.
“As an employee, you learn about finding and retaining customers and the importance of marketing and teamwork – good transferable skills that you should highlight on your CV.”
Raising the money
Plenty of franchises can be started with less than £10,000, some with less than £1,000 – though don’t choose your franchise on cost alone. Check that it’s the right franchise for you.
Money raising options include:
• Family borrowing. A formal legal agreement prevents arguments and proves to franchisors and other potential investors you have sufficient funds.
• Peer-to-peer lending or crowdfunding.
• Banks and other lenders generally prefer to lend for franchises than for independent start-ups. Franchisors can introduce you to potential lenders. Also, look at the Start Up Loans Company and the Prince’s Trust.
Nihar Vithlani and Devin Gohil: BabyBallers
“We chose the franchise route as we had not owned a business before”
Fellow economics graduates Nihar Vithlani and Devin Gohil decided to start their own business by investing in a BabyBallers franchise.
Nihar, 24, says: “We both graduated in economics from Nottingham in 2017 and went into jobs in financial services.
“When we felt ready to start our own business as a side hustle, we chose the franchise route as we had not owned a business before.”
They chose BabyBallers, the franchise that involves running football and movement skills sessions for toddlers.
Devin, 25, says: “We both love football, had played in Sunday leagues and used to hold mini-coaching sessions with friends.”
“The franchise package includes a website, social media, class plans and equipment, support and training,” Nihar says.
“Having an existing, proven business model means you can set up faster and more easily and focus on growth sooner.
“In the future, we’ll recruit coaches to take sessions, but we will always do some of the coaching ourselves because we love it.”
Nihar and Devin funded the franchise from their savings and the first classes started in Ruislip in May.
Devin adds: “A franchise is an easier way for graduates to start a business than setting up independently, especially if you want to run it alongside a day job.
“However, ensure you’re passionate about it because it’s easier to keep pushing the business along if you’re genuinely interested.”