Why Older People Are Purchasing Franchises
Think you're too over-the-hill to start a biz? These over-50 entrepreneurs prove it's never too late to buy a franchise.
Don't assume 50-year-olds are past their prime-many are finding that the years after 50 are a perfect time to start a business, and buying a franchise is a great way to do that. Whether motivated by personal desire or out of financial necessity, these ambitious individuals are pursuing entrepreneurial endeavors in every imaginable field. Here's a look at several late-blooming entrepreneurs who purchased a franchise after age 50.
A New Beginning
Today's older population is healthy and active-Worldhealth.net reported that 7.5 million Americans 55 and older belonged to gyms in 2002, compared with 1.5 million in 1987. These older Americans have both the desire and the ability to stay in the work force well past the age of 50. In a recent poll from The Wall Street Journal and NBC News, retirees were more interested in an active life, which involved working, than their parents' generation.
For aging individuals seeking new work options, franchising is an appealing choice. "Folks in their 50s are energetic," says David Handler, senior vice president of the International Center for Entrepreneurial Development, a Cypress, Texas-based holding company for nine franchise brands. "They've perhaps lived the corporate life, and they're ready to try it on their own."
Dan and Mary Ann Jones represent this growing population of older franchisees. After giving retirement a try for a couple of years, they came to the conclusion that it was not all it was cracked up to be. "We were doing nothing, playing golf and having fun," says Dan, 58, who left his corporate job at an insurance corporation to see if the grass was greener on the other side. "We decided we needed to do something else, because we were getting bored."
The Joneses spent nearly a year researching franchise opportunities before selecting Kwik Kopy Business Center, which provides printing, copying, packing and shipping services. They had both worked in upper level management jobs and felt a franchise like Kwik Kopy would allow them to use the skills they had acquired from a lifetime of work in the corporate world. "We've both been in high-paying jobs and under tremendous amounts of stress," says Dan. "We had come to a point in our lives where we wanted to have fun and build something."
Since opening their franchise in Temple, Texas, in July 2003, the Joneses have been busy, devoting as much as 70 hours per week to the business. Still, their franchise has granted them a newfound freedom they hadn't known in the corporate world-the freedom to set their own schedules. They have also acquired skills such as doing the payroll and even using the copy machine-duties they never had to learn before. Most important, having a franchise has breathed new meaning into their lives. Says Mary Ann, 55, "It's just like having grandchildren."
Layoff to Startup
Marc Weinberg turned to franchising when Prudential downsized and he was laid off after 23 years as a corporate employee. Weinberg walked away with enough money to retire comfortably, but after six months, he was ready to start working again. Though plenty of opportunities were available in the corporate world, he didn't want to follow that same path. He also had no desire to start his own business. "I didn't want to start my own company from scratch," he says, "because I'm the type of person who would work myself to death."
So instead, at the ripe age of 50, Weinberg hit the bars. He purchased a Bevinco franchise in Stanholdt, New Jersey, and started getting paid to keep bar and restaurant staffs accountable for the products used and the cash received. Now, eight years later, he is taking things relatively easy-working about 30 hours a week and bringing in about $100,000 a year. He also works with the franchisor to assist other franchisees. And he still has time for his favorite hobby: racing his powerboat.
For Weinberg, getting laid off wasn't devastating; instead, it was a golden opportunity to fulfill a longtime dream of running his own franchise. "[Owning a franchise] feels terrific," he says. "I get to reap the rewards of my own work directly instead of having to contribute them all to the company."
The Benefits of Being Older
Health and longevity are keeping people in the work force longer, but financial reasons are also a driving factor. According to a 2003 survey conducted for the Employee Benefit Research Institute, 70 percent of older baby boomers and 73 percent of younger ones expect to continue to work in post-retirement jobs. Many are staying in the work force to prepare for a time when they can no longer work. "People have not put enough money away in order to live comfortably; so, in many cases, they are forced to go back [to work] and do something," says Stuart Taylor, co-founder of Your New Career Inc., a career counseling firm in Menlo Park, California, that caters largely to older people.
Careerwise, Don Salatich, 58, has experimented with everything. He spent several years designing turbines for jet engines at GM, worked as an executive for a brush manufacturing company, and even operated a hot-air balloon business. After a lifetime of work, Salatich was mentally ready to retire, but the decline in the stock market took away all hopes of being able to do so and still live comfortably. In search of financial security, he gave real estate a shot, but things didn't click until he tried his hand at scooping ice cream.
In 1997, Salatich discovered Cold Stone Creamery when he and his wife stopped for dessert during a road trip. "In my world, no day is complete without ice cream," he says. "I walked in, and they were making freshly baked waffle cones. That aroma just grabbed me."
Six years after that fateful trip, the aroma still hadn't loosened its grip. He gave into temptation and purchased two Cold Stone franchises in 2003. Sure of his decision, he decided to relocate from Cincinnati to Indianapolis to get good locations. He also made a significant financial investment, with one store alone amounting to $290,000 in startup costs. "I have two passions in life: golf and Cold Stone," he says. "At my age, I knew I couldn't succeed at golf, but I had a great shot at succeeding with Cold Stone. So we went ahead and got involved with two franchises."
Salatich hopes the franchise will ensure a secure retirement, putting him and his wife back in control of their destiny. "I look forward to the day I can say 'I'm retired,'" he says. "This is an investment we hope will provide us with what we need in the future so we can retire comfortably."
Never Too Late
Those who fear that 50 is too late to buy a franchise may want to think again. Age is not an accurate representation of your energy or ability to succeed. A recent study conducted by the National Council on the Aging found one-third of Americans in their 70s consider themselves middle-aged. "People who are 68 can be all over the map," says Taylor. "Some have the vitality of a 22-year-old, and [others] have no vitality."
The Joneses, Weinberg and Salatich all agree that getting off to a late start was actually an advantage. "At 50, you're much more realistic," says Weinberg. "You have many more tools in your arsenal if you've been in the business world for those preceding 30 years."
These franchisees are going strong. The Joneses don't plan to stop at one franchise. They hope that in five years, they'll be able to start looking for a second franchise. Eventually, Weinberg will turn his franchise over to his son, move to the South with his wife, and try retirement again. Salatich's future will be filled with ice cream. He plans to hire a general manager to run three locations while he and his wife focus on planning, marketing and possible expansion.
One thing is for sure: Even after the age of 50, it's never too late to take a leap of faith and begin again. "You've heard people say, and you've maybe said yourself 'If I had only known this when I was younger, I would have done things differently,'" says Dan Jones. "In a way, this was kind of that chance."
Before You Start
Are you ready to start over but don't quite know how? Stuart Taylor, co-founder of Menlo Park, California-based Your New Career Inc., shares some tips on what to consider before opening a franchise.
- Examine your finances. Evaluate how much money you will need to live and how much will be allocated to purchasing and operating the franchise. Says Taylor, "The worst thing when starting a business is to run out of money five months after you start."
- Consider going into business with a partner who complements your strengths and weaknesses. "It's always good to get a partner," he says. "You want someone who will really go fight with you on an even basis."
- Seek objective advice from people other than family and friends. Says Taylor, "I believe strongly in having someone outside your immediate sphere of family or friends, [who tend to be] either completely down on the idea or overly euphoric about it."
- Make sure it's something you love doing. Taylor explains, "It's really a fact-finding, due-diligence type of exercise, starting with yourself and then other things around you to see if this is something you want to do."