They are energetic, they are fresh, and they are full of enthusiasm and ready to take the challenges that come their way. Read on to know the rights and lefts of the bumpy roads that lead the young minds to franchise industry.
All business owners face certain challenges, but working with young entrepreneurs often has additional challenges and obstacles that their mastermind counterparts are less likely to encounter. The GenX who are students or have just passed out from college experience even more demand on time, energy and resources when associated as franchisee of any brand.
However, this doesn’t mean that these young minds are less successful than any other czars of the reign. In fact, the statistics show that aspiring entrepreneurs are starting businesses at more than twice the rate of success than of the experts in respective industry-majority-owned businesses. These budding entrepreneurs show that they are resourceful, and able to succeed, despite all the odds.
Today’s energetic youth is fast changing the rules of the game and setting up higher benchmarks. Various franchise chains offer them specific options and business models suiting the feasibility and sustainability for the young professionals.
Like a coin has two facets, a few brands’ owners also contradict on their opinion of being associated with the young investors. Some opine that youth is always in a hurry to set huge benchmarks without any or negligible experience. Futuristic approach is at times missing as short term goals are always a priority for the amateur lot while others strongly support their participation. Some companies have no reservations in working with young entrepreneurs. On the contrary, they find young minds more professional in their approach as well as more risk taking.
It is an exciting challenge for franchising brands across sectors to partner with young investors as they are more enthusiastic, have risk taking ability, innovative and to top all are receptive to an out-of-the-box approach as compared to the traditional business approach. But at the same time they are a little impatient. At the same time seasoned business professionals come with a hands on experience and in-depth knowledge business dynamics. These veterans have a strong belief in traditional and more conventional business models and approach.
A retail brand for youth, Madame also banks upon the experienced and professionals to get associated with. Akhil Jain of Madame asserts: “Youth backed with suitable professional education in retail/ sales are always welcomed as associates but in actual the present scope and stability is still with the veterans. At times, the youth is in a bit of hurry to achieve certain heights in too lesser time.”
Also to this, Aditi Srivastava of Diet Mantra adds: “Young franchisees are generally very raw to the business and require strategic handling. General word of advice for young entrepreneurs is to be a little more patient and stay focused; this will help them realise their dreams.”
On the contrary, Rizwan Sayed, Director, Your Fitness Club (YFC): “A person shouldn’t be a conventional thinker but an idea man.Young and talented people are important for YFC; we develop leaders and experts through them. They bring new ideas and energy into the company. We want young professionals to take part in shaping the future of YFC. I highly believe in the potential of young professionals and the energy levels they come with. Being from the fitness industry, energy levels are very important to me.”
Both the fraternities have their own pros and cons. The selection depends upon the brand's approach for particular territory. The franchise brands would like do a rapid expansion with more enthusiastic and young investors but there would be some territories wherein the companies would like to move with firm footing so the ideal partner would be experienced and professional. The franchise industry per se has a lot of potential and a lot needs to be conquered.
Success- Failure ratio
As per the survey of TFW on the success: failure ratio of the brands that are associated with young-preneurs the result has come out to be 50:50.
The retail brand, Promart is on the lookout for passionate fashion lovers and like-minded young entrepreneurs to partner with. But they still need people on-board to work with them who can help the brand in achieving success. Promart looks out for a successful leader and franchise professional as, experience is always an added advantage. “We are always open to working with young professionals as we believe that they bring newer ideas on the platform. On the other hand, we believe that the more experienced lot brings with them a lot of wisdom, vision and knowledge who understand the finer nuances of dealing in this model,” says Punit Agarwal of Promart.
No fiscal assistance
However, funds are another challenge for young entrepreneurs to start up a business of their own or to seek any franchise of the brand. Our survey report gives a thumbs down to the young franchisees in the context of any funds or other loans to start a business by the franchisor. None of the franchise chains provide any financial assistance to its franchisees. All they do is recommending franchisees the bank which has processed funds for the franchisees before or on the purpose of the brand name. On this Sachin Sabharwal of Di Bella Coffee India says: “These days thanks to the number of financial institutions that have set shops as Indian young entrepreneurs do not have much of a problem in procuring funds for a reputed franchise. However, we would be willing to provide our franchise partners the necessary assistance whenever the need arises.
The key areas identified, which are universal in nature and are of youth concern, are professional approach, training and experience that would only come with the passage of time and the work youngpreneurs would do. The hurdles could be overcome and there are possibilities of making a difference, if these issues could be tackled successfully when the youth are very responsive to all sorts of challenges. Only thing they need is proper guidance, training and opportunities to channelize their energies.
Below is the list of challenges faced by a few brands based on the interview of TFW:
VIKAS PANJABI, MD, The Chocolate Room India Pvt. Ltd: We would only face problems when some entrepreneur is not following our terms and conditions and trying to tamper the quality and not being serious with business. In that case we would either try to solve it by helping them out, or giving them warnings, if it does not work we are very strict for whatever the franchisee is, we would terminate them.
HAZEL SIROMONI, MD, Maple Bear: So far, the challenges in working with young entrepreneurs have been very minimal. It has overall been a very positive experience.
ADITI SRIVASTAVA, Director, Diet Mantra Wellness Pvt Ltd: Young franchisees are generally very raw to the business and require strategic handling. At the same time young franchisees are keen learners so through our extensive support we help them to get into the system and understand the modalities of our business model.
SACHIN SABHARWAL, MD, Di Bella Coffee India: Young franchisees lack maturity. They expect quick growth and expansion. Another challenge faced is that young franchisees do not have a large source of funds. We have to ensure that they have the perfect balance of funds for capital expenditure and operating expenditure as businesses take 2-3 years to break even. We have to ensure that they are financially viable.
AKHIL JAIN, Creative Director, Madame: Youth is always in a hurry to set huge benchmarks without any or eligible experience. Futuristic approach is at times missing and short term goals are always a priority.
PUNIT AGARWAL, Promoter & CEO, Promart Retail India Pvt Ltd: There are many challenges involved when it comes to franchising especially with the younger lot. This often happens because they are a young bunch of enthusiastic people who have a mind of their own, can make decisions and are open to change when it comes to business dealings. Retailers often face issues like helping the franchisee understand the concept, logistics, financial regularities etc. Maintaining the same look and feel in each store etc becomes important for which proper education needs to be imparted to franchisees. To over-come this challenge, Promart maintains very transparent relations with its franchise owners. Incase of any complications, not only do we explain our concerns freely but expect the same rapport from all our franchisees.
As per the survey of TFW on the success: Failure ratio of the brands that are associated with youngpreneurs the result has come out to be 50:50.