Out-of-work execs hunt for white-collar franchises Derek
Derek Sankey, Financial Post Published: Monday, June 29, 2009
Gary Prenevost (L), President of Frannet, chats with his client Joel Nelson (R), owner of PuroClean Emergency Services, in Toronto, Ontario, June 24, 2009Tyler Anderson/National PostGary Prenevost (L), President of Frannet, chats with his client Joel Nelson (R), owner of PuroClean Emergency Services, in Toronto, Ontario, June 24, 2009
What began as a passionate career in sales for Joel Nelson took him to senior sales positions with major pharmaceutical companies and by most measures a very successful job, but there was something missing.
"As I moved up the corporate ladder, that joy of the [customer] interaction was replaced by grueling deadlines and layers and layers of detail," he says. In addition, job security for managers and executives has been left in limbo by the recession. "In this day and age in corporate, you can always be replaced ... quickly," he says. "The joy I was getting out of my job was getting further and further away from me."
Mr. Nelson is among a rapidly growing number of mid- and senior-level business managers and executives who have decided the best way to control their destinies is to become their own bosses. Rather than build a company from scratch, these white-collar workers are applying their skills to "white-collar franchises," according to franchising experts and recruiters.
"Our business has more than doubled," says Gary Prenevost, president of the Toronto office of franchising brokers Frannet Canada, which caters to white-collar professionals seeking what he calls white-collar franchises. It's only June and he's almost met last year's sales numbers.
Anthony Kaul, founder of Higherbracket.ca, a job board dedicated to professionals earning more than $100,000 a year, recently added a section to his job portal for franchising options because of increasing demand among his 50,000 member base. "They don't want to make sandwiches for a living," Mr. Kaul says. "What they want is an outlet for their skill set."
A recent survey he conducted among his membership revealed 85.7% of respondents said they had considered self-employment as a possible career path.
"Because of the economic downturn, a lot of these guys were sitting out there watching their retirement savings dwindle, watching their gravitas at work decrease, looking at having to be in the job market for the first time in five, seven years against guys who are 15 years their junior," Mr. Kaul says.
Old wealth-creation strategies, such as registered retirement savings plans, stock markets, pensions, real estate and long-term employment, aren't considered secure anymore, Mr. Prenevost says. "Especially in the past eight months, the world has changed," he says.
He contends age discrimination is a factor, as well, even if veiled. "People aren't hearing they're too old, but they're hearing they're too over-qualified," he says.
There is a shift in attitudes that is not a short-term reaction to a fad, but an indication of a larger trend as more executives see greater risk in long-term employment than they do in self-employment.
"That's why more people are investing in the one area of security they have – me," says Mr. Prenevost, who defines white-collar franchises as those that provide intellectual capital, instead of the stereotypical food and retail outlets. White-collar franchises include consumer and commercial services, such as business coaching, health-care services, home maintenance and décor, environmental services, financial oversight and accounting or any other consultative franchise adventure.
These types of franchises enable white-collar professionals to leverage their skills in management, marketing, communications, human resources and others.
For example, in March Mr. Nelson bought a franchise from PuroClean, a property and disaster restoration services company, where he will be able to apply his management and sales experience. It may not appear to be white-collar by definition, but it uses his transferable business skills in sales and management.
"For me to keep the spark alive, diving into a franchise is a really neat opportunity because I'm everything within this organization now," he says, adding as business ramps up, he'll hire people to take over the production or operational side of the business.
Meanwhile, he's calling on insurance brokers and agencies to pitch his firm to get on their databases of firms they recommend to clients after some disaster such as a flood hits a homeowner. And he gets more professional and personal fulfillment by being able to make a difference in people's lives, something his corporate job never did.
Fears about leaping into a franchise in the midst of a recession are unfounded, according to Mr. Prenevost. In fact, he says, it could be the best time. "It's been said many times that fortunes are made in recessions. They're not made in the recession, but they set the foundation in the recession."
For those with the right skill set and passion, a white-collar franchise be a good consideration. Money is cheaper, although banks are almost forensic in their qualification process, so good credit is a requirement. Labour costs have fallen and there is a larger pool of talent, just as real estate costs have come down, reducing overhead. The ramp-up period may be slightly longer, but that will ensure franchisees have strong, efficient processes in place to gradually capture the upside of a recovery.
"Perhaps, franchising is a very, very easy entry into the world of self-employment," Mr. Kaul says.
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