Why Most Franchising Firms Aren’t Targeting New College Grads

This is a post by guest blogger Don Sniegowski, the founding editor of the daily franchise news site BlueMauMau.

“There’s a youth movement brewing in the franchising world,” a recent story in The Wall Street Journal reports. Published in late September, the story explains that as boomers are retiring, franchise brokers and franchisors are putting increasing efforts into recruiting new college grads. But is this a real trend?

The story quotes a small number of franchisors, including WSI, a Canadian-based franchisor of Web consultants, which says it is aggressively seeking young people, and direct-mail franchising chain, ValPak (watch the video interview about its strategy below). But three or four people painting their noses blue do hardly a trend make.

The story does offer more evidence. Several franchise companies were quoted as saying they had joined the Veterans Transition Franchise Initiative, known as VetFran, in order to attract young veterans. But the program gives veterans of all ages a discount off initial franchise fees of member companies, so that doesn’t really track.

Probably the strongest evidence that the story provides is this:

“David Omholt, a franchise broker in Plano, Texas, says about a third of the 200 companies he works with have stopped giving age ranges for their target franchisee and are changing their marketing materials to minimize jargon and depict franchisees of all ages. ‘It’s quite a departure from the traditional mentality of who to recruit and how to recruit for new franchisees,’ says Mr. Omholt.”

Omholt, who is also Chief Executive Officer of The Entrepreneur Authority, a franchise brokerage firm that matches franchise buyers for franchising clients, sees a world that could be and points out to franchisors a class of students trained in entrepreneurship pouring out of American universities. He also sees an increase of young entrepreneurs loaded with cash. Omholt provides a persuasive argument because in this credit crunch it is quite believable that franchisors are now looking for any warm body to buy a franchise. But in a recent interview with BlueMauMau, he’s says most franchisors are not targeting new college grads. “To be very clear, my message was not that franchisors are no longer giving direction on demographics. The sweet spot still is, and probably always will be, 45- to 54-year olds.”