Age concerns

Younger and older workers have been hit hard by Britain's

nose-diving job market. However, as the franchising industry holds it own despite the recession, it could be the sector with a solution. Rob McKinlay finds out 

 

There's a saying in sport: ‘if you're good enough, you're old enough'. It usually appears in conversation when a team bloods a 16 or 17-year-old in a big match, in response to critics who berate the youngster's lack of experience. And many - Michael Owen, Wayne Rooney, Theo Walcott are recent examples - have proved it correct.


But does the old adage ring true in the world of business, where the cost of failure can be so much higher? Is someone in his or her 20s cut out for running their own company? And on the other side of the coin, what happens to those more advanced in years? Does the motivation to succeed wane towards retirement age?

Thanks to a little-known phenomenon labelled the ‘credit crunch', Britain's job market is nose-diving, recruiters are consequently pickier than ever, and these groups propping up each end of the age spectrum are looking particularly vulnerable. A spring 2009 survey by the Chartered Institute of Personnel and Development found that 45 per cent of private sector companies were not planning to recruit graduates or school leavers (ages 16 and 18 years) in the next three months, while roughly one in seven firms consulted would ‘exclude' over-65s from the recruitment process, whether already in work or returning to work.

Meanwhile, a May 2009 YouGov survey for Standard Life found that 85 per cent of the population did not intend to stop work altogether post retirement age (taken as 55 - the age at which pension benefits can be taken as of 2010), and a third wanted to continue in full-time employment. Both snippets of research suggest a healthy percentage of the population ready and willing to work, but without a great deal of hope.

So is it all doom and gloom? Well, one industry that traditionally bucks the trend of recession is franchising, but is this sector suitable for younger and older workers?

Statistics from the British Franchise Association (bfa) paint a bright picture. The total percentage of franchisees up to the age of 30 rose from five to seven per cent between 2003 and 2008, and the percentage of new recruits (those who have held their franchise for two years or less) went from an already impressive 15 per cent to 17 per cent in the same time period.
It also looks good for the over-50s in franchising. The total number of franchisees in this age group reached 40 per cent in 2008, up by two per cent on 2003; and new recruits also jumped, from 24 per cent to a healthy 28 per cent in 2008.

Tim Harris, franchise director at ChipsAway, says age doesn't even come into the company's thinking when recruiting new franchisees: "We look at every applicant on their individual merits, rather than their age. We partner with people of any age who have the right attitude, then train in competency. We have franchisees from as young as 21 to beyond retirement age."

At In-toto Kitchens, however, there are reasons why its particular franchise offer might not be ideal for everyone. National franchise manager Steve Saunders suggests a candidate in his or her 20s is unlikely to be in the right financial position. He says: "This is probably too young, as we are asking for high ticket values and it is unlikely that getting together around £80 to £100k from a bank would be possible for most 20-year-olds." Steve says he wouldn't be worried about a potential franchisee nearing retirement, though, in the right circumstances: "Not if it was the right candidate. However, a good succession plan would probably need to be in place; most stores are on a 10-year lease."

As Steve Saunders points out, the ability and means to raise enough finance for initial start-up costs - often including a substantial franchise fee - would seem to be the biggest obstacle to potential franchisees in their 20s.
Niraj Odenda, 27, didn't have that problem. After spending some time in an outsourcing role in India, he had saved enough money to return home and take on a Mail Boxes Etc franchise in Leicester. The company had no reservations in taking on such a young franchisee: "They were quite encouraging actually," recalls Niraj. "They didn't have any problems with my age. They said, "you're young, you should go for it". In fact, I felt like they actually gave me a bit of extra help and guidance."

Niraj also encourages others in a similar age band: "If you can raise the money, then I think franchising is great because when you're young, you're full of ideas and if you want to start up on your own, those ideas don't necessarily materialise in the way you want them to. You've got someone there to guide you."

ChipsAway franchisee for Gloucester, Stuart Yorston, tells a more cautious tale. The 23-year-old feels that the company initially had reservations. "I am sure my inexperience in the work environment was a concern, as obviously failure does not reflect well on them," he says. "However, I feel I showed a strong commitment to the business, willingness to learn new skills and develop myself both as an individual and as a business."

Stuart believes he made the right move, though, especially with the job market looking so bleak: "If franchising is something you have considered, the current financial climate may just be that push you need, and from my experience it was well worth that leap. There are still plenty of people out there willing to spend their money... that's why I am still so busy, and have been since I started."

Bill Sayer, 55, had run his own training consultancy for 27 years and was semi-retired when he and his wife, Lynn, decided they wanted a change. "I wanted to be busy doing something new, but I just hadn't found the right opportunity,"he says. "Ideally, we wanted a complete change of lifestyle."
A Camping and Caravanning Club franchise in Herefordshire was just the tonic. "The business and our lifestyle here continue to tick every single box for us," they enthuse. "Not that we ever want to retire, we love it so much that we'll probably carry on working until we are too old to do it any more."
That change in lifestyle and added control that a franchise can offer someone appears to be a big draw for the older franchisee, especially after many years in full-time employment.

The potential financial reward from working for oneself is also a factor, as Tim Harris points out: "ChipsAway offers the opportunity for a very lucrative pension top-up. Our older franchisees recognise that and are motivated accordingly."

Former company director John Scholey, 49, made the move from full-time employment "to pursue a less stressful life". He believes franchising is a great option at his stage in life, as long as you choose carefully.

"I looked at various opportunities and I really wanted something that, firstly, gave me support, ie, they weren't going to take my money and run; secondly, something that interested me; and thirdly, something that was more of a cash cow than a massive investment, which I particularly didn't want at my age."

After an open day with ChipsAway, John's mind was made up and he took up a territory in North Leeds. He admits there are challenges moving from a salary, but the benefits more than make up for it.

"If you don't work, you don't get any money, which isn't quite what I'm used to!' he laughs.

"But my expectations were a lot less. You don't have the salary requirements that you probably had 10 years ago, but it's been good - I've beaten all my targets."

John was also wary of taking on too much: "I looked at McDonalds, Costa, etc - they're very good. But I thought, "hang on a minute, I'm nearly 50, I'm gonna have a business and they're going to push me to have two or three more". Do I want all of that stress? It's out of the frying pan and into the fire."

And so, with UK unemployment rising faster than at any time since the 80s, it appears that these vulnerable age groups may well find their chink of light in franchising, whether their decision comes due to a lack of other opportunities, redundancy or simply from the need for a lifestyle change.
Once the decision is made, though, it's not a clear road to success - young or old, there's undoubtedly a need for careful planning, good advice, the ability to raise finance and, most importantly, hard work. As John Scholey puts it, "it's not a panacea, franchising. You've got to pick it carefully and throw yourself into it."

The rewards are there for those who do, though. Heed the words of our wise and wordly 23-year-old, Stuart Yorston: ‘"f you have the support from family and friends and you find a business you can be passionate about then it's well worth the risk and, as long as you're committed, you will make a success of it!"

Wayne Rooney couldn't have put it any better.