A new era of franchising | Global Franchise
Global Franchise

Wednesday 7th December, 2022

Search Stay in the loop Sign in Join Global Franchise Pro
Logged out article
Currently reading
A new era of franchising
A new era of franchising

Insight

A new era of franchising

The Great Resignation is attracting new talent to the franchise sector, as workers seek fresh opportunities, more autonomy and a better work-life balance. Could franchising be the next big business trend?

The Great Resignation, the phrase coined by U.S. academic, Anthony Klotz, to describe the exodus of people from the job market following the Covid pandemic, resonates with millions of those who have packed in their traditional 9–5 jobs for something more flexible and fulfilling. If COVID taught us one thing, it is that there is more to life than work. The term might sound a bit depressing, and for many sectors – for example, aviation and manufacturing – this is undoubtedly the case. Yet, switch ‘resignation’ with reimagining, or reset, realization, or reshuffle (the latter preferred by the professional social network, LinkedIn), and perceptions can be altered quickly to view ‘The Great Resignation’ through a more positive lens. One that much better represents the world of franchising.

Franchising enables people to start their own business with the backing of a trusted and experienced brand or presents a business method to realize opportunities and grow a business as an emerging brand. As such, franchising has both seized the opportunities of the Great Resignation and is helping to tackle many of the challenges it has presented.

What is the Great Resignation?

Simply put, the Great Resignation is the name given to the trend of post-pandemic quitting or people changing their jobs – or seriously considering doing so in the short term.

The pandemic shook us up collectively and provided the space and impetus to rethink our lives, what matters to us, and, let’s face it, our mortality. We didn’t commute. We spent time with our families. We got dogs (and cats). We gained a new-found appreciation of teachers and of nature. We pursued passion projects and focussed on our wellbeing. And we became used to the flexibility that the new normal provided to us in our working lives.

We proved that remote working could be productive and that the concept of a 9–5 workday belonged in Henry Ford’s factory floors, and no longer aligns with our connected, automated, and complex lives today. And we came to the realization that we don’t need to suffer that power-crazed manager, fluorescent bulbs, or poisonous colleagues. We realized the value of our finite time and how important it is to spend it wisely.

A perfect storm

Combine these work-life, life-work epiphanies with what Klotz referred to as ‘pent-up resignations’ and we have a perfect storm.

Various adaptations of this saga will continue. Over 50 per cent of the 20,000 people surveyed by Microsoft across 11 countries this summer reported that they are overworked, burnt out, and disengaged. Gallup also reported an alarming 85 per cent of employees worldwide are either not engaged or actively disengaged at work. Regardless of global economic insecurity, these numbers are unsustainable.

Geographical differences

The U.S. has the jump on the rest of the world when it comes to the Great Resignation – or at least the data surrounding it. Whether this provides us with an understanding of what is to come globally is not yet clear. Certainly, geographic nuances are becoming apparent. Growing economic uncertainty and recession fears globally will likely mean that the Great Resignation will not follow the same trajectory it has in the U.S. so far.

Quarter three data published by Joblist in October revealed that despite record numbers of Americans quitting their jobs, the Great Resignation may be slowing amid growing economic uncertainty. In fact, while over one-third (36 per cent) of employed job seekers are still planning to quit their job in the next six months – this represents the fourth successive month of decreasing quit figures – and a sizable drop from the 73 per cent peak in August 2021.

In tightening economic uncertainty, people are less likely to resign and Joblist highlights a shift in job-searching behavior that reflects this: “Whereas the majority of employed job seekers were planning to quit imminently last August amidst a strong job market, most now seem to be browsing opportunistically and do not necessarily plan to quit.”

In April, business publication The Financial Times reported that British economists had determined that while the U.K. was also experiencing a Great Resignation, workers were not making radical career changes, or quitting to live their dreams, but were simply switching employers.

In its August blog, Understanding the Great Resignation in Australia 2022, management software provider The Access Group states that Australians have also been reassessing their career and lifestyle options, but that the Great Resignation has been gradual. Meanwhile, the Australian Treasury estimated that the country was witnessing a 10 per cent increase in pre-Covid levels of people changing jobs between November 2021 and February 2022.

Resilient and robust

At the start of 2022, prior to the war in Ukraine and its truly global geopolitical and economic repercussions, the forecast for franchising was positive; with franchises anticipated to see a growth of 3.1 per cent growth in 2022 in the U.S.. This was, as the 2022 Franchising Economic Outlook notes, off the back of an “exceptional year in 2021…helped by the strengthening labor market and steady consumer spending.” The report went on to forecast franchise economic output at $826.6 billion in 2022.

Anecdotal evidence, at least, indicates that the forecast remains broadly positive and that the business model is alive, is well, and is evolving to tackle emerging challenges.

There are some indications, however, that projected numbers are not quite being hit for the year. In early August, franchising and operational experts, the Franchise Group lowered its full-year guidance, citing inflation leading to reduced profitability in its home furnishings businesses. It did also, however, see growth in its pet, health and wellness, and education services.

Challenges because of the Russian invasion of Ukraine will persist, with the World Economic Forum (WEF) warning of continued supply chain disruption and rising food prices.

But with every challenge comes opportunity.

The great headhunt

UK-based specialist franchise recruiter Simon Wise of Franrec says, that for him, it’s “not the Great Resignation but the Great Head Hunt” and that it’s a “great time for good talent.”

While Franrec is placing personnel across the board, it has been particularly busy strengthening the franchisor’s support teams, head office staff and field-based franchise development managers. Franchisors too have taken this opportunity to conduct gap analysis to understand their central team’s strengths and weaknesses, establish career development pathways, and implement retention strategies.

At a political level, the freshening up of companies because of the Great Resignation has also been recognized for presenting businesses with an opportunity to reset and review.

Of course, there are challenges. Caregiver recruitment expert Leigh Davis, owner of Davis+Delany, has been working with his franchise clients for many years to change how they recruit their teams. Long before lockdown, Leigh had identified a need to change recruitment red lines, recognizing people want something more meaningful and rewarding beyond financial, believing there is “much more to the human animal.”

Leigh believes that outdated methods of recruiting need to change and become “magnetic,” by which he means demonstrating emotion, value, trust, and authority – and applied from advertisement to interview and beyond.

For franchisees, he sees huge opportunity to attract talent at a ‘right angle’: transitioning people into franchise growth areas, from roles in cleaning or driving to becoming a care worker, for example.

The Great Resignation has opened a pool of franchisors, franchisees, and employees. People with diverse transferable skillsets, who are ready to make a change. This was reflected by Andrew Seid, senior consultant at franchise consultancy MSA Worldwide, who identified that over the last 18 months a range of candidates who wouldn’t otherwise have been in the franchisee pool have become available and engaged.

Micro and macro

“At every level, local franchise businesses offer opportunities for economic and career advancement,” said IFA President and CEO Matthew Haller. “For aspiring entrepreneurs, franchising removes barriers so they can more easily open their own businesses. On the other side of the Great Resignation is a great reimagination that has emboldened white collar workers and store employees alike to become local business owners.”

That’s the thing about franchising, from master-level country rights to a local-level franchise, there are many accessible options. On a micro-level, passion projects have been growing from community to community, something that has become particularly apparent with emerging child-focused, kid-concept brands. Reading enhancement and tutoring, for example. People have skills they enjoy using and they add value to customers. Something that gains traction in one community is growing across communities as a franchise.

There are franchise success stories across the board and interestingly, some of the very themes behind the Great Resignation are the focus of new and growing mature franchise brands. Health, wellbeing, personal services, care, and elderly services have engendered particular interest – very similar to areas of growth over the past five years.

Working for yourself, not by yourself

The turnkey nature of franchise businesses makes them particularly attractive and sensible options for many people motivated to start up their own businesses.

Ed Quinlan, President of Chem-Dry, the world’s largest carpet cleaning franchise operating in 55 countries around the world, believes this is because of four core reasons:

  • Putting the person in control
  • Providing flexibility and adaptation
  • Empowering through community and all the tools in place
  • Leveraging the power of the brand.

In a recent survey of Chem-Dry franchisees, Ed’s team asked them what advice they would give to new franchisees joining the business. The overwhelming response was ‘follow the program’. Testimony, of course, to 45 years’ experience enabling Chem-Dry to share a clear and actionable program with its franchisees and a healthy franchisor-franchisee relationship.

Set up for success

Becoming a franchisee effectively de-risks the decision of starting a business. From the outset, a disclosure document provides information on investment, cost, and potential earnings to enable informed decision-making.

Training programs and manuals are provided together with access to support personnel and a swathe of toolsets and resources. Franchisees immediately become part of a community and have the power of an established brand behind them.

These features make the option of franchising attractive to the ever-growing pool of candidates quitting to make change.

Retaining talent

Franchises are not immune to the challenges of the Great Resignation – the same threats apply – the loss of staff, burden on existing team members, business continuity, and recruitment challenges.

Retaining staff is always easier, more efficient, and less disruptive than recruiting. Labor certainly continues to be a pain point. Local franchisees in all territories have struggled to hire and retain, and connectivity between team members at all levels continues to be challenging.

But practices have been adapted, flexible working hours introduced. Benefit packages and support from franchisors across their franchisees has never been stronger. There is a collective drive to ensure retention.

What next?

Franchising has demonstrated adaptability and resilience in the face of multiple challenges in recent years. Facing a volatile geopolitical world and uncertain global economies, more challenges can be expected. The Great Resignation, however, has attracted a new talent pool to the world of franchising, providing opportunities for people looking to make changes in their careers and lives. In turn, this has added breadth and depth to the franchise community. We could well be entering a new age of the franchise.

The author

Claire Fleming is a business writer covering a range of industry sectors and themes globally

Start making informed business decisions. Join Global Franchise Pro for free today.

Latest trends and investment opportunities

Unlimited access to industry news and insight

Exclusive market reports and expert interviews

Insight Investing in people power
by Global Franchise Team
Insight Out of office
by Global Franchise Team
Insight A new era of franchising
by Global Franchise Team
Insight Frontline to franchising
by Global Franchise Team