The Graduate seduced by franchising

It’s undoubtedly tough being a graduate. After three or more years of resting, socialising and partying, interspersed with a little light studying, being thrown into the world of work must be a little daunting. The Franchise Magazine looks at how graduates the length and breadth of the country are rebuking lazy journalistic stereotyping by taking control of their own careers and investing in a franchise.

As Chandler once explained to Rachel, “The fear is the motivation to go after a job that you really want.” But if the constant barrage of newspaper articles, about the thousands of jobs that do not exist, hold even a shred of truth, then for many graduates the job of their dreams will always be exactly that. However, according to new government statistics, a new pathway is becoming ever more prevalent. Graduates, fresh from under the sheltered warmth of the university wing, are breaking out and going into business for themselves.

CeX franchise owner, Gareth Thompson, took the decision to invest in his own CeX location after studying for a history degree while working in retail to pay his way through university. He says: “I worked for a CeX franchise store and I could see the potential returns from the investment. I felt I could make it work for me so talked to my family and we made the decision together.”

Gareth is not alone. According to data published at the end of June 2013 by the Higher Education Statistics Agency (HESA), a growing minority of graduates are choosing not to partake in the bloodthirsty contest to secure one of the few jobs that are available, but are going into business for themselves instead. In fact, according to these statistics, going into business is the third most popular career pathway for new graduates.

Chris Sharman, Global Franchise Director of Challenger Sports believes franchising is perfect for graduates: “The franchise system is attractive to young people with less business experience because it offers support and advice in key areas, such as marketing and sales. It also supplies a proven business model for entrepreneurs to follow.”

The higher education model is designed to produce practical, well-educated and freethinking individuals, who are ready to reach the top positions in today’s economy. However, the pressure cooker that is the jobs-race is often not the right recipe for freshly-baked graduates.

ChipsAway franchise owner, Stuart Yorston, quickly grew weary of a fruitless job search and decided to look into franchising with the help of his father. He said: “I was struggling to find a job that was related to my degree and would allow me to enjoy a practical hands on aspect to my career. My father suggested looking at franchising as a viable option, which would allow me to gain the relevant experience of self employment with the support from a well established business and support team at HQ.”

But Stuart is quick to point out that buying into a franchise means taking on a big project that needs hard work to produce results: “Franchising is by no means for everyone and should not be seen as a guaranteed way of successful self-employment. It requires skill from the individual to drive and self motivate in order to make the business a success.

“Many skills learnt from university regarding independence and money management can be applied, but the support from friends and family is also key to making any business a success.”

Investing in a franchise is frequently regarded as a more secure method of going into business because an investment comes with an established business model.However the initial capital needed to buy into a franchise causes graduates to despair.

Some graduates are luckier than others in this respect. The bank of mum and dad is a common method of funding a franchise investment from a graduate’s point of view. However, for many, asking family members or friends for an investment is simply not an option.

Stuart adds: “While looking for a job related to my degree in geography following my graduation, I worked in the sales team for BT and started putting money aside. I required a bank loan to fund the ChipsAway venture, which they were more than willing to lend, with the remaining funding coming from my personal savings and help also from parents.”

Government grant schemes are in place, including Heritage Enterprise Grants, which support enterprising community organisations, however they are hotly contested and often provide only a fraction of the capital required. In all probability, bank loans will factor into some part of the funding process for any new graduate looking to buy into a successful franchise. And, according to The Restaurant Finance Monitor, banks are more willing to lend to franchises for a good reason: “Banks may believe that franchises offer loans an extra line of defence, because a franchisor might be willing to step in and help a struggling business – or get it sold – rather than see a location fail.”

Chris Sharman adds: “We often refer enquirers to places like the Start Up Loans Company to find finance and backing, so they can afford to get a business off the ground.”

But for the vast majority of graduates, a degree comes hand-in-hand with a mountain of debt, usually to the tune of £25,000 upwards, which means that borrowing yet more money is hardly desirable. However, the range of franchise investment demands differ hugely, which means the amount you borrow does not necessarily have to be a life changing sum of money – even if it does end up changing your life.

Market leading brands, such as Dublcheck, commercial cleaning franchise and A-Star Sports, make their opportunities available for less than £10,000. These contracts include full training and continued support for investors, to give them the best chance of establishing a lucrative business.

Recent 2013 graduate, Jonathan Warburton, now owns the East Cheshire territories for TetraBrazil and TinyTykes sports coaching franchises. He explains: “As a recent graduate, the choice of working for someone else or setting up my own business was a no-brainer:

“Now seems like the best time to take a calculated risk and really challenge myself to see what I am capable of, rather than leaving it until later when I might have a mortgage or kids to worry about as well.”

This view is becoming ever more popular as the economy ebbs slowly towards the point of recovery. Now that the future is looking brighter than it has in the past five years, it may be the perfect time for graduates to opt out of the duplicitous fight-to-the-death scenario the jobs race has, for many fresh graduates, become.

The franchising model suits the inexperience of the graduates, as each brand brings in its own specific training programme. If you are a graduate floating aimlessly in a pool of uncertainty, then by embarking in an exciting love affair with a proven franchise, you can change the rules of the game and travel your own lucrative career path.

My View with Gareth Samuel

Graduate employment is a two-way agreement – A job offer is not a privilege

Many hiring businesses now see offering a graduate a job as an act of generosity. Like throwing bread to the starving masses of young professionals ready to do anything to gain even a negligible advantage. Only the genuinely courageous university qualifiers are opting out of the battle and carving out their own jobs as franchise owners.

Employers often talk of giving new graduates ‘a chance’ as though they are acting out of absolute altruism. In reality, frequently the reverse is truer. Often graduates breathe fresh life into companies, with new ideas and raw energy, qualities that more experienced (and higher paid) candidates more than occasionally lack.

The interview process for a graduate has become a stressful and bizarre Colosseum. Micromanagers, knowingly holding all the power, play the role of Emperor, gasping in sadistic delight as graduates fight to the death before them. Huge corporations demand candidates spend hours filling out application forms longer than their dissertations and more thorough than the Spanish Inquisition – this should not be expected.

Going into business, either through franchising or independently is in many ways an escape route from the attritious wear of the jobs market. This is not to say it is by any means an easy way out. The majority of franchise and business owners I talk to on a daily basis reiterate that the richest rewards always go the way of the most industrious. Variable factors and decreased financial security is scary terminology in the West, but it applies almost synonymously to those with the courage to invest in their own ability.

The reward of flogging success out of a cantering business provides saccharine vindication for those brave enough to risk it all by forsaking the meat market and taking back their independence. As many employers abuse the power shift further, through zero hour contracts and criminally unfair ‘work experience’ offerings, the individualism of franchising is allowing graduates to regain control of their own futures without isolation. The franchising model gives hungry graduates the tools to hunt down far juicier success independently, free from the frequent patronisation of big business.