• Wed. Nov 30th, 2022

How to buy a franchise business in your 50s

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Bailey says the average FranNet customer is 55 years old and it takes about three to four months to complete the franchise selection process before starting the buying process. In addition to sorting out the franchisee’s skills and preferences, FranNet also requires its clients to review the Franchise Disclosure Documents (FDDs) that each franchisor is required to submit to the FTC. These forms provide a wealth of information on the financial status of the brand.

“In a franchise disclosure document, you can see the [franchisee] failure rate, ”says Bailey. FDDs “give a list of the number of entries each year and the number of exits, so you can compare one deductible to another and get a sense of the overall risk you are taking. “

FDDs can be obtained directly from the franchise company or through certain state commercial agencies. These forms are especially worth researching as they also contain contact details for franchisees, so potential buyers can speak directly with current franchise owners.

“We tell them to make calls until they’ve talked to enough people to get the full picture,” says Bailey. “They should talk to some [franchisees] who are just superstars, some who are sort of in the middle of the bell curve and some who are struggling. Find out what makes them different. Is this the location? Is this the skill set they brought to the table? Then ask where you see yourself in comparison.

FranNet does not charge its franchise clients to help them navigate the selection process. Instead, he receives brokerage fees from the seller of the franchise, in the same way that some real estate agents receive commissions. But other franchise brokers charge aspiring franchisees, and that can be another big cost to get started.

“You have to be sure a lot of due diligence is done,” Bailey says. “It’s not something you get into, no matter how you fund it or where the money comes from. Take your time. Know your options. And make sure you’re comfortable with the possibilities, both up and down.

3. Don’t forget your retirement plan

People 50 and older should also be sure to consider how owning a franchise business fits into their retirement goals, both financially and personally.

“Deductibles could be a great way for people to supplement their retirement income,” Stites says.

Of course, that’s only if the business is successful and the owner hasn’t spent too much of their savings to get started. Choosing to dip into your retirement savings – and, if so, how much to withdraw – is a deeply personal decision that should not be taken lightly.

Eboda, who had knowledge from her early career as a banker, felt comfortable using some of her retirement savings to purchase her PrideStaff franchise.

“People make this decision based on where they are.” From the start, I was absolutely convinced that I was going to be successful in running my business, ”she says.

Not all potential entrepreneurs have the same level of comfort. When making the decision to buy two McDonald’s restaurants in Texas, Tanyel Harrison Bennett, 54, was adamant that she would not use any of her retirement funds to start her business.

“Everyone has to consider their own level of comfort and what they are ready to do,” says Bennet. “When I looked at it I said in my 50s, I’m closer to retirement than I was when I started over 30+ years ago. I can’t catch up to 30 years in the next 20. If I don’t have to jeopardize my retirement, I don’t want to.

But with informed decisions and smart practices, a franchise business can deliver additional income in retirement as well as personal growth that cannot be matched.

“It was like a second career,” says Eboda. “You can determine where you are going to make your mark and how you are going to be determined and make a difference. And, for me, it was that job. “

Kenneth Terrell covers employment, age discrimination, work and occupations, careers and the federal government for the AARP. He previously worked for the Education Writers Association and American News and World Report, where he reported on government and politics, business, education, science and technology, and lifestyle news.

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