Growing a 57-year-old franchise brand means planning is essential.
For Shannon Iverson, vice president of development at Taco John’s, it also means preparing for the next generation of operators.
“We still have a majority of our original franchisee base, and a lot of them are going toward retirement,” Iverson said. Some franchisees “are second generation, and some are working on bringing up their teenage children into the business, so we’re going toward third generation.”
With this in mind, franchisees should be able to enter and exit the franchise system with dignity and respect, she said.
In preparation for this, Iverson and her team launched a program for retirement and succession planning nearly two years ago, using education, breakout sessions, webinars and free business valuations led by industry experts.
The team created succession planning workbooks and held calls with franchisees so they understood their options. “One of the surprises to me was learning that some of our franchisees didn’t realize there was value in their business,” Iverson said. “When renewals came up, what I found were some of our franchisees were just opting to not renew, close their doors for retirement and then sell their land. Some just didn’t know there was value in selling the business, so we got ahead of that.”
Iverson urged brands to be proactive and careful in succession planning.“That’s been their baby,” she said. “That’s been their job and their community and their family for anywhere from 25, 30, 40, 50 years. In parting with it, there can be some heartache.”
Don’t expect next-generation owners to know everything.
“You want to still roll out the red carpet and give them that firsthand experience of going through the full vetting process, even though they’ve been in the business and probably grew up eating potato olés behind the counter,” Iverson said. “You don’t want to shortchange them, and we don’t want to assume they know everything … so we’re going to give them all the tools, resources, conversation and time investments they deserve to have as a new incoming franchisee.”