With little to lose, many 20-somethings decide to go for it
About 15 Soccer Shots zee's are in their 20s, like the Kenney-Rebholz duo in top photo.
Some brands attract a younger set of franchisees than the average—with financing help and extra training in some cases. The result: a resourceful group of entrepreneurs, willing to take a risk.
Two semesters shy of a degree in pre-medicine, Kristen Kenney and her future husband left college to become franchise owners.
Kenney and fiancé Kevin Rebholz took a bold step in August 2011 to start Soccer Shots Central Indiana, a franchise that teaches young kids how to play soccer. While attending Penn State University, the couple learned about Soccer Shots when Kevin coached for the brand in the area. They became convinced it would be a great business opportunity.
“We decided to go for it and get our own franchise,” Kenney says.
Kenney, 25, and Rebholz, 29, invested about $15,500 to start the Carmel, Indiana-based franchise, financing 80 percent of it with a bank loan and the rest with personal savings. Sacrificing a degree in elementary and physical education, Rebholz also left Penn State to be Kenney’s business partner.
The gutsy move by the pair is paying off. Their business is expected to post revenue of $350,000 to $400,000 next year and reach 1,000 students by late this year, a nearly tenfold enrollment increase since opening. Kenney and Rebholz, who plan to marry next August, travel to preschools, daycare facilities, elementary and private schools and other places to teach soccer.
“It’s been a whirlwind, but it’s been really fun,” Kenney says.
Kenney and Rebholz are typical of many 20-something franchisees, young entrepreneurs acquiring brands as diverse as Pita Pit, TCBY, The Grounds Guys, Soccer Shots, WingZone, Best in Class Education Center and Wireless Zone, to name a few. Some franchisors actively target the younger set, who typically need help with financing.
An uncertain job market and the rising popularity of entrepreneurship are among the factors why many young folks are becoming franchisees, experts say.
Eric Stites, CEO of Franchise Business Review in Portsmouth, New Hampshire, says buying a franchise is less of a gamble for 20-somethings because they usually have little to lose. He says most don’t have a family to support, a mortgage to pay or a six-figure job to abandon in order to start a business.
Hao Lam, above, founder of Best in Class Education Centers, says about four of his 12 franchisees fall in the 20-something group.
“In most cases, they lack general business experience, but that can be easily overcome if they get into a good franchise system, with strong training and support,” Stites says.
He says some brands just naturally attract young people because of their business model, including Soccer Shots, Fitness Revolution and College Hunks Hauling Junk.
A growing brand, Best In Class Education Center, aims for young franchise owners. Hao Lam, founder, CEO and chairman of the Sammamish, Washington-based private tutoring and education enrichment firm, says four of his 12 franchisees in five states fall in the 20-something group.
Lam says Best In Class targets young teachers/entrepreneurs because they are passionate about education and willing to follow the system. He says someone who has taught in the school system for 20 years may not be willing to follow his franchise concept. Overall, Best in Class has 23 locations.
Lam allows franchisees 30 and under without much money to initially invest to pay half of the $30,000 franchisee fee in installments and no interest. “We offer that because many of them are just out of school and don’t have the financial backup to open a business,” he says.
Justin Bredeman, vice president of recruitment at Soccer Shots, says the brand is attractive to young entrepreneurs because it offers strong margins and can be started with a total investment of around $20,000. He estimates that 10 to 15 of the Middletown, Pennsylvania-based company’s roughly 95 franchisees are in their 20s, with many of them investing in the concept after being referred by friends or colleagues.
Rick Bisio, author of “The Educated Franchisee, “ says the biggest challenges for young people often are a lack of experience and money to open a franchise.
He says they need to ask themselves key questions: Do I have the skills or abilities to make this business successful? Would the business provide the lifestyle I want, not just today, but a few years or a decade from now? “That’s the way you have to look at it,” he says.
Stites sees social skills as another big hurdle for younger franchisees. He says many communicate so much electronically, they don’t know how to carry on a face-to-face discussion with someone. He says that could be a huge disadvantage to young business owners if they can’t communicate/market/sell adequately to prospective clients and their own employees.
After being a full-time award-winning sales person for a local newspaper and working some part-time jobs as well, Jamie Baker figured why not work that hard for herself? Her aspiration became reality when she became sole owner of CertaPro Painters of Wichita East in Wichita, Kansas.
Aiming to avoid bank financing, Baker used creativity to acquire the franchise in December 2011. She borrowed $100,000 from her mother’s boss and a family friend who watched her grow up. She is doubling the monthly payments on the 10-year note to pay the loan back in five years to greatly reduce the interest expense. Baker also invested $50,000 of her own money.
Baker, 29, has relied on a strong work ethic to build her confidence and a thriving franchise. Since opening in February 2012, Baker says revenue this year is approaching $750,000 and could hit $1 million next year. And while she believes being a female in a male-dominated industry has been her biggest challenge, it also has enhanced her success. She says she can’t count the number of times she’s walked up to a home and was greeted with “Oh, I thought I’d be meeting with a man.”
“Once I am able to prove that I know what I am talking about, then I gain their credibility and trust,” Baker says.
Jacob Cruse is following in his father’s footsteps in the franchise restaurant business.Now 24, Cruse opened a Pita Pit location in Lawrence, Kansas, in August 2012, catering to University of Kansas students and tourists. He became a franchisee after running one of his father’s Pita Pit locations in Sioux Falls after college.
He invested $135,000 to open his own location with a bank loan and financial backing from Tom Cruse, his dad with whom he co-owns the business. His father also owns three other Pita Pit locations. Making his own business decisions versus relying on someone else to do so is among the younger Cruse’s biggest challenges. Of course, he has the luxury of seeking his father’s advice if necessary.
“There are a lot of things you don’t know are there until you’re in the owner’s shoes,” Cruse says.