Navigating the Path From Employee to Franchise Owner

From HVAC repair people to waitresses and baristas, many employees have made their way up the ranks to purchasing their own franchise. In fact, many franchisors prefer to set up new franchise locations with those who have already worked in the industry and have experience.

From Golden Corral to Outback to Dutch Bros, many franchisors offer programs and incentives to managers and regular employees alike to make this transition however, it can also be a challenging one. With some help, it isn’t hard to navigate.

Here are some tips to make the transition a bit smoother.

Hire a Business Broker
If your particular franchisor does not offer an employee franchisee program, you might want to look at a similar franchise. Even if they do, there are legalities to navigate, and hiring a business broker like one in the Sunbelt network of brokers can ensure that you are getting the best deal possible.

Because business brokers buy and sell businesses all the time, they often have an inventory of franchises for sale, and can not only connect you with the seller, but refer you to financing and education resources to help you become a franchise owner.

Get Some Experience
Whether or not you have been a manager before, you may not have managed a business like this one and spending some time in the “trenches” will make you a better owner. Many franchisors like Dutch Bros require you to work for a certain amount of time in the barista business and prefer hands-on owners.

The same is true for other franchisors as well, so if you have some experience working for the company as an employee, it will help your chances of passing the screening process of becoming an owner. Besides, it will make you a more empathetic owner and manager in the long run.

Take Some Business Classes
There’s a lot more to running a business than being a good manager of people or knowing how to troubleshoot HVAC issues. Profit and loss, annual reports, cash flow and balance sheets, and working with the IRS to make sure that not only are your taxes are solid and up to date, but that you are taking care of your portion of employees’ taxes too.

Besides accounting, there are things like dealing with vendors, hiring managers and employees, and satisfying investors (if you have them, and you should). In most cases you will spend much more time doing these administrative tasks than you will doing hands-on employee stuff.

If you don’t have a business degree, that’s okay. You can be a franchise owner without one, but you will need to get some of the same types of knowledge from somewhere. Join your local small business association and other networking groups, and work with other entrepreneurs and franchisees who can help teach you the ropes and how to avoid common pitfalls.

Ready to make the transition from employee to franchisee? Have questions? Contact a Sunbelt business broker today to get them answered and learn how to get started.

Don Pippin Jr, CBI CMSBB
Certified Business Intermediary