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Why Millennials Make Great Franchisees -- And How to Recruit Them An increasing amount of franchises are starting to realize the power of youth, and working to attract young and hungry franchisees.

By Blaire Briody

entrepreneur daily

This story appears in the January 2020 issue of Entrepreneur. Subscribe »

Nicolas Oretega

Cassidi Brown wanted her Coolgreens to stand out among the nearby restaurant chains in her Dallas suburb. So she began building a selfie wall, covered with succulents and vines, that would live at the store's entrance. She promoted the store's opening with social media posts featuring the staff playing Jenga. And two days before the official launch, she opened the doors for a fundraising event for low-income residents in the area.

As a franchisee, Brown is ambitious and innovative. She also believes she knows how to draw in young customers because, well, she's their age. At 28, she represents a generation the franchise industry has struggled to recruit."Franchise systems are aging," says Mark Siebert, the founder of iFranchise Group and author of The Franchisee Handbook. "As they do, there's a need to replace the older franchisees." The numbers are stark: The majority of franchisees across the U.S. are between 46 and 65 years old, according to FRANdata, a franchise analytics company. But as the industry ages, it also grows. Roughly 300 companies begin franchising each year. In 2017 alone, 43,500 new franchise units opened up -- meaning demand for new franchisees will only increase.

Related: What Were You Doing at Age 19? This Guy Already Owned His Own Franchise Business

And who is frequenting all these new franchises? Increasingly, it's young people. Food is, of course, franchising's largest category, and millennials spend 23.8 percent of their discretionary budget eating out, according to data by Bank of America. That's nearly double what baby boomers spend, making it increasingly important that franchise brands know how to appeal to the next generation of customers.

This is why, for many franchise brands, youth recruitment is becoming a priority -- though it isn't always easy.

To start, young entrepreneurs have different motivations than their predecessors. In a poll conducted by the Center for Women and Business at Bentley University, 84 percent of millennials said that making a positive difference in the world was more important than professional recognition. They want to make money, sure, but they also want to have an impact -- which means franchise brands need to think differently about their recruitment and what elements of the business will appeal to younger potential owners.

There's also the question of how to reach them, given their diverse media habits and perceptions of the franchise industry. Rick Grossmann, author of Franchise Bible, has found that many young people think franchising is limited to restaurants. That's certainly not the case; Grossmann's own franchise, Friend of the Family, for example, helps seniors move and downsize. Still, it's a perception he's had to fight against as he introduces his company to potential younger owners.

But even if franchises do a good job appealing to the next generation, they should be prepared for some built-in challenges. Younger franchisees often lack experience, struggle to come up with money, or simply don't understand the industry, says Siebert. So companies committed to recruiting younger franchisees are often compelled to offer programs that support professional development, along with robust financing options. (Grossmann, for instance, has begun offering zero-percent-down business loans to lure in franchisees. The incentive made it possible for his first franchisee, a single mother in her early 40s, to launch her business.)

At Coolgreens, the franchise Cassidi Brown bought into, all this is top of mind. Coolgreens' average franchisee age is 34. Its franchising website stresses that it offers "more than our healthy menu" -- including in-store yoga nights, fitness classes, and an attitude of being "unabashedly passionate about making our communities a better place to live for everyone." It also features photos of young franchisees, including Brown.

But it didn't start that way.

Related: Meet 16 Teen Founders Who Are Building Big Businesses -- and Making Big Money

The company is based in Oklahoma City, and it serves down-the-line salads, sandwiches, and wraps. It launched as a corporate chain in 2009 and operated that way for six years -- until 2015, when a new CEO named Robert Lee took over. He was only 29 at the time, and had spent most of his 20s opening and operating 12 leased salon-space franchises. His task was to turn Coolgreens into a franchise, and, given his own age, he says he just hadn't thought about youth as a liability. So when he began searching for franchisees, he cast what he says was perhaps a wider net than an older CEO might have.

That's what created an opening for Brown.

Brown's road to Coolgreens is typical of young franchisees. She graduated with a degree she wasn't using and wasn't passionate about -- graphic design. Brown was working as a server at The Melting Pot in 2013, the year she first stepped inside a Coolgreens as a customer. The place drew her in with its bright colors, sustainable packaging, and healthy food options. Prices were approachable: Most items were less than $10. It didn't hurt that she was on a first date with her now husband. The pollen of love was already in the air.

A year later, Brown and her husband moved to Dallas and were disappointed that Coolgreens hadn't made it to Texas. When the company launched its franchise program, Brown learned about it, secured a loan from the Small Business Administration, cobbled together a 20 percent down payment using inheritance money and her husband's savings, and became the first franchisee in the area. Her store opened in September 2019, and three more stores have opened since. The company plans to open 10 locations in 2020.

Related: She Was Told 'No' 100 Times. Now This 31-Year-Old Female Founder Runs a $1 Billion Business.

So far, Coolgreens' millennial franchisees have demonstrated huge potential, says CEO Lee. They're adaptable, tech-savvy, and interested in learning. They show a knack for bringing in young customers -- and, if all goes well, both franchisee and customer could stick around for decades to come.

Brown, too, is happy with her decision…and her selfie wall, which Coolgreens happily endorsed. She feels that the brand accepts her and the people she hopes to serve. "What I love about Coolgreens is we're inclusive and free to be ourselves," she says. She recalls meeting a transgender employee behind the counter at another location, and one of her first hires showed up for the interview with orange-and-red hair. Brown herself has a lip piercing. "Accepting all lifestyles is important to my generation and the generations below me," she says. "That might be a big reason why people are flocking here."

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