Okay, so look – Franchising is not a new concept at all. Most of the franchise systems that we are familiar with came around during a boom after the second World War. But even before that the concept of franchising dates back to the Middle Ages. Not too surprising right? Well, if franchising is such and an old, or tried and tested, concept, how can it be the “wave of the future?” Well, it all has to do with the nature of the upcoming generation that is entering the workforce – Gen Z, and how the franchising model, if you’re good at it, will suit their desires perfectly and an equilibrium of supply and demand.
For the most part, people are usually concerned about the infamous Millennials and all the facets that they have brought along with them which have altered the way we all do business. But Millennials are now pushing 40 years of age and are starting to settle down in their lives, leaving the innovation and growth up to Gen Z. So, let’s talk about this group of individuals and how they will affect the future of business through franchising.
As a diverse group that places confidence on their skills in technology, spends more time doing homework than its predecessor, and will likely enter the workforce with less experience than the Millennials, Gen Z is currently the largest demographic of consumers. They expect to earn $60,000 in their first job, are motivated by money and advancements, and most importantly, will not be seeking to disrupt the workplace.
Those last two points (of, I’m sure, many other descriptions) are critical. Gen Z has abandoned the concept of the “The Dream” and developing their own proverbial Facebook style startup. Instead, to them work is work. They carry less idealism with a higher regard for savings and see themselves as individuals to the point of finding a workplace that suits their beliefs, rather than trying to alter the workplace to meet their needs. The implications on business of this new generation is focused around consumption.
Gen Z does a high level of analysis before spending any money – in a world where information flows like water, can you blame them? Because of this analysis and information overload, they put a larger value on “Access” as opposed to “Possession”. For example, having access to endless movies through Netflix is much more important to them than owning a particular movie on Blu-Ray. When they do purchase things, these possessions are used on manifest their individuality, which, ultimately, will require an alteration in marketing techniques towards omnichannel process & structure. All of which is anchored in ethics.
Now, if you take a critical look at any franchise system, or rather any prudently designed and executed franchise system, you’ll see that the model itself caters exactly to what the Gen Z demographic needs. However, it is important to note that entrepreneurship and the desire to achieve transcends age; meaning that although the method through with success is obtained changes, the yearning for achievement within an entrepreneur sticks around.
A successful franchise system is rooted in its mission and core values. Franchisors and franchisees work as a team towards a common goal. Sometimes these goals are focused on a social initiative, growth of an industry, or even something much larger. But the focus is consistent and persistent. The stability of these ethics is exactly what Gen Z is looking for. Sure, a systems prerogative may not match one person, but it will definitely suit another. This steadfast direction and belief that a great franchise system has, will be one of the pivotal attraction points to this new generation of entrepreneurs.
Another factor of a great franchise system is business economics that can generate margins and profitability for the franchise partners. Before franchising, a system needs to be able to determine if franchisees can earn an income that they are happy with, all while paying royalties to head office. If modelled and deployed properly, and based on a proven and replicable design, a franchise system caters exactly to the consistency and revenue production that this new fiscally responsible demographic is looking for.
As the years go on, franchise systems evolve to suit new buyers. This upcoming massive group of new buyers are exactly the kind that the natural progression of the franchising industry is moving towards. A drift away from marketing that is interruptive and instead focused on personalization and usefulness. Cost savings and value, winning over gratification. Businesses built on technology and displaying a purpose for their existence. Pragmatism and practicality to foster communities of individuals that support local entrepreneurs, staff, and customers.
All of these factors of supply and demand are culminating in a massive shift towards franchising being an optimal and preferable pathway towards entrepreneurship and business ownership for Gen Z. It’s the wave of the future.
About the Author
Robert Bruski is a Canadian entrepreneur and a CEO and Co-Founder of Ctrl V, the world’s first virtual reality arcade franchise. He is a value investment professional from the finance industry in Toronto. He partnered with his long-time friend COO, James Elligson, to come up with a compelling and unique way of incorporating technology and virtual reality into their everyday lives.
