Why Are B2B Franchise Businesses Such a Fast-Growing Sector?
Executive Recruiting

As the economy has continued to improve, the franchise industry has been a leading sector in job creation. Though that growth slowed a bit in July according to a monthly poll from ADP, franchises added about 12,300 jobs that month. The business services sector added the second highest number of those jobs, with restaurants leading the way by a bit.

If you asked 100 Americans what comes to mind when they think of franchises, most would probably say McDonald’s or Dunkin’ Donuts or some other consumer-facing business. In reality, B2B franchises have been growing at a faster clip compared with other types of franchises for some understandable reasons.

Corporate flight is undoubtedly the most significant. Even before the great recession, there was increasing pressure on mid-career executives in corporate America. This pressure was exerted by a growing corporate interest in increasing productivity while reducing costs. The subtext of these dual objectives is, “We need a younger workforce with higher energy and lower salaries.”

Executives in their 40’s and up have either been downsized out or are examining their options as they become burned out. Of course, companies are losing talent and institutional wisdom as a result, but that’s a conversation for another blog.

The good news in this trend for the franchise world is that many of these experienced men and women are connecting with their inner entrepreneurs and starting businesses of their own. They turn to franchises to fill in their experience gaps and so that they don’t have to start completely from scratch.

Business services are an excellent choice for those fleeing corporate America because there is a growing need for such services, number one. And number two, seasoned executives understand the business world. In a potentially uncomfortable career shift, it is their comfort zone.

In the case of our FPC executive recruiting franchise owners – most of whom come out of the manufacturing world — their industry experience gets them out of the blocks quickly, even though most have never been recruiters. Our success model includes hiring additional recruiters to work in their businesses so they definitely contribute to the job creation statistics of the business services franchise sector.

We recently read an article on the International Franchise Association (IFA) blog that mirrors many of our own beliefs about what a franchise organization needs to bring to the table to help corporate execs make a successful transition to business ownership. The author was Jeff Connally, president and CEO of CMIT Solutions, a franchise that provides IT services and products. Here are a few key things the franchise company should bring to the table:

Initial training that takes into consideration the individual owner’s strengths and weaknesses. We train owners in our proven recruiting process, of course. But we assess each owner’s needs for training and help in other areas, such as marketing, staff management, strategic planning and other aspects of running a business. Where their previous experience didn’t prepare them, we provide tailored teaching and support.

Connection to Peer Support. Owners helping owners is one of the great strengths of a franchise network. A strong franchise concept provides opportunities for owners to meet one-to-one and in groups where they can benefit from each other’s experience in addition to that of the franchise company. At FPC we sponsor regional meetings, an annual national conference, conference calls and other ways to give owners the opportunity to interact for purposes of discussing business issues and trends. We also provide a powerful intranet for actual business development and lead sharing.

Access to Experts and Resources. Although their new profession may be related to the old, corporate execs benefit from introductions to experts in their new industry. They also need introductions to trusted business resources, vendors and speakers in areas with which they may not be familiar. Regardless of our internal expertise, we have always brought in outside experts to provide our owners with well-rounded support.

Ongoing training and field support. There’s nothing worse for a new B2B franchise owner than to go through initial training and then be tossed into the world to fend for themselves. Issues come up, the business environment changes and markets evolve. Site visits, accompanying owners on sales calls, help with staff training and evaluation on an ongoing basis are all critical to ensuring long term viability. Owners and the franchise company have to be partners in each other’s success.

If every B2B franchise company operated on these principals, it’s certain that the job creation numbers in the sector would be even higher. For those potential franchisees coming from executive positions in corporations, hopefully this post will provide you with some key things to look for when exploring franchise businesses.

Thank you for sharing your thoughts and questions in the comments. What do you think would be helpful to you in transitioning to ownership?

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