Why Corporate Refugees Like Franchising When They Answer the Entrepreneurial Call

3 min read · 7 years ago


Executives who have spent their entire careers working in corporate America often find themselves ready for a new challenge after several years in the c-suite. For many, that challenge is to start their own business.

Entrepreneurship is a terrific adventure. The thrill of being your own boss, becoming an expert in your field, building wealth and a family legacy while taking control of your destiny are just a few of the perks. However, making the switch from corporate life to small business ownership can present a new set of challenges to consider.

As a franchise consultant, I help middle to senior-level executives from the corporate world determine whether or not they are right for small business ownership and what that business might look like. Here are five of the most common challenges they address when deciding if they are ready to go out on their own.

1. Your systems are gone.

Corporate executives are accustomed to working within a company’s framework. They know when the day begins and ends,  who they report to and who reports to them. Most importantly, they know which departments handle which tasks.

Upon becoming an independent small business owner, those systems cease to exist. All decisions and responsibilities begin and end with you. For some, the challenge of creating a new business and systems is exhilarating, but for others it’s quite daunting. For the latter, franchising is a nice middle ground. They get to work within a proven operating system while still enjoying the perks of being an entrepreneur.

Related: 6 Things They Don’t Tell You When You Leave the Big Corporate World for Your Own Business

2. Loss of peers and mentors.

Going into battle daily with people who have been there before or are experiencing similar challenges now is psychologically therapeutic and professionally beneficial. They are people who can relate to how you are feeling and serve as sounding boards for ideas and solutions.

Small business owners can sometimes feel very alone as they set about to grow their business. Without that favorite colleague located in the office down the hall, they might develop a sense of insecurity or hopelessness when things go wrong. With franchises, there is built-in peer-to-peer communication. Being able to count on fellow franchisees and learn best practices helps owners through the inevitable hiccups and keeps them on the track to success.

3. Transference of risk.

Both corporate employment and small business ownership involve risk, but they are very different. As an employee, the biggest risk is job security. With someone else in charge of your professional and financial future, you’re always aware of who you need to keep happy in order to keep your job. Even then, changes in the corporate culture, the competitive environment or the economy can lead to a loss of employment.

Small business owners aren’t likely to fire themselves, but they take on the risk of business failure. Gallup reports that for the first time in 35 years, American business deaths outnumber births, so people are certainly taking this risk seriously. A good way to mitigate the risk of entrepreneurship is franchising.

 According the The Franchise Business Economic Outlook: 2015, franchise businesses are expected to grow and create more jobs at a faster pace than the rest of the economy for the fifth consecutive year. The number of franchise establishments will grow this year by 12,111, or 1.6 percent, to 781,794. Economic output from franchise businesses is estimated to increase by 5.4 percent over last year to $889 billion. Franchising offers a bit rosier path to business ownership than going it alone.

Related: Is Declining Business Failure Holding Back Entrepreneurship?

4. Most people hate change.

Whether it’s a perceived loss of control, excessive uncertainty or concerns about competence with a new challenge, dealing with change can be a major challenge for anyone who has spent decades working in a job and is now trying to tackle entrepreneurship.  

When it comes to franchising, there is the support of the franchisor with resources in place to stay on top of, and anticipate, changes that affect your industry. As Ray Kroc, the founder of McDonald’s describes franchise business ownership, it’s being in business for yourself, not by yourself. Change is inevitable but with a franchise, you don’t have to deal with it alone.

5. Whatever it is you used to do, you’re now in sales.

One of the biggest misconceptions corporate refugees have about small business ownership is that in their new business, they’ll be focusing most of their efforts on whatever it is their business offers. In reality, most small business owners are salespeople, spending 80 percent of their time acquiring customers.

With a franchise, there are different roles an owner can have. Salesperson is a frequent one, but it is not the only one. There are some franchises where the business model has the owner serving as manager, working “on” versus “in” the business.

Understanding marketing trends and how to get your messaging in front of the right audience will be a new skill for many entrepreneurs, but it is critical to succeeding. Franchising offers proven models for marketing success, but it will still be up to the entrepreneur to understand and execute these models to succeed.

Related: 9 Signs You Should (Maybe) Quit Your Job Now

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