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Parents Buying a Franchise for Children?
I am a national newspaper columnist working on a column about parents who help their young adult children, especially recent college grads, by buying a franchise and turning the operation over to their twenty-something children to run.
Some parents see this as a good way for young adults to gain some traction in an extremely tough employment market. I am looking for examples of families who have done this for their children and are willing to be interviewed. I would also like to receive advice from experts on the pros, cons and legal limitations of such setups.
My deadline is end-of-day Thursday, July 22. Please contact sue.shellenbarger@wsj.com. Thank you!
Parents Buying Franchises for A Young Adult
We have had very good success in this area but it takes solid qualification of the young adults regarding not only their qualifications but also their level of commitment. With the right person we get an energetic can-do franchisee with a strong support system. A young adult is often not weighed down by debt or additional responsibilities. The family investors can provide emotional support, financial advise and hands-on assistance. It's a combination that we like very much at Abrakadoodle.
Gift or "earned" inheritance?
I tend to agree with the others that if a parent just buys a business to hand it over to a child or anyone else for that matter that it is not likely to turn out well.
However, as Ray notes, there are plenty of family businesses where the kids grew up working in them and eventually took over. The key there is that the kids know with complete certainty what is required for success and in fact have been doing it for years. It isn't a lifestyle or cultural change.
Our Dunkin system is replete with these stories. In fact, a video from Fox posted right on this website describes on such family that resulted in nearly 700 units, now mostly run by the 2nd and 3rd generations. Calling Sue Andrade would be a good place to start.
That doesn't mean that there sibling squabbles, where one or more doesn't WANT the business, but that is another story.
I have handled maybe a half dozen of these. My negative
recomendations were always rejected. The result was always failure. None would consider being interviewed.
The profile is standard. The family has so much money that a total loss is pocket change. The kid never even remotely approaches reality in the process, as he expects that everything needed to make it work will simply be purchased.
The lights may be on, but nobody is home.
Good luck, I've seen
Good luck, I’ve seen many a sibling buy out the parent after growing through the franchise and kick some serious butt. But I haven’t come across a coddled kid appreciating an ice-cream. I've suggested to a few that they were ripping off their parents. One recently and the single, devoted mother could not afford the illusion.
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