As published in the Amazon bestseller, More Than Just French Fries: 15 Business Thought Leaders Share Insights on Franchising Success.
My business story started when I was five. My father worked in corporate sales and marketing at the time. When he arrived home one day, I had set up shop with my toys on my baby blanket. I asked him if he wanted to buy some. When he asked me the price of a toy, without hesitation I asked him how much money he had to spend. For him, that moment was a proud one and a good indicator that my apple had fallen from his tree.
Three years later, Dad left his corporate career and bought the first of several franchise businesses that our family would own and grow. Through high school and college, I worked in some of these businesses and at college graduation, he invited me to really cut my teeth in business by helping me take over a struggling packaging and shipping franchise. I did just that, turned it around and sold it for a profit. At 25 years old, I had tasted the fruit of equity and enjoyed success largely on my own terms.
I watched my college peers struggle in traditional corporate jobs and I realized I wanted something more. I wanted what my family had when I was a kid. We all ate dinner together, had nice vacations and enjoyed life. If I worked for a corporate giant, I knew I’d probably not have my ideal life. I wanted to earn the income I desired and have control of my time and schedule. So, I knew I wanted to work for myself or build my own success instead of hoping to climb up a shaky corporate ladder before retirement. Thankfully, I am realizing my financial and lifestyle goals through family franchise ownership.
What Is a Multigenerational Family Business?
One common and old-fashioned example of a family business that still exists today is funeral homes. Many of their names include “family” or “and sons.” Family businesses used to be passed down and preserved through future generations.
Today, parents and children go into business together instead of the parent just starting the business and passing it on to the child.
That’s an important part of modern multigenerational businesses. Business owners today want to create something of value for their children and grandchildren. In my case, my father didn’t just own one business or have one line of work. He was an entrepreneur who helped me get started. He wanted me to work with him and not for him, and I was determined to build something of my own eventually.
Baby Boomers and Millennials: What A Team!
These two generations actually make a great team. Boomers who work in the corporate world are nearing their expiration date there, and many younger people today despise the idea of having to give their whole life to their employer. The perfect solution may be to start a family business. The number of family entrepreneurs teaming up together from these generations in recent years has been growing significantly. The parents have the money to start a business and want better ROI to secure their retirement, and they also want to see their children succeed in the future. Millennials are eager to build something of their own in accordance with their values and they, for the most part, have a strong entrepreneurial spirit.
Every Family Business Has Its Struggles
I think we can all admit that we’ve had hundreds of arguments with our parents over the years. Working with your family can be an ideal situation for your future and your finances. However, it comes with struggles that you have to work through and overcome. These are some examples my Dad and I know well having worked together in
- There’s a power struggle. The child is the future of the business, and the parent is the authority figure, right? So, who should be in charge? As humans, we have a natural tendency to create a pecking order. If there’s one thing entrepreneurs share, it’s a passion to take charge. So, this naturally creates a power struggle. In many cases, parents make the larger investments in the business. They may be hesitant to let a child make major decisions and risk losing their hard-earned money.
- There may be respect issues. Family dynamics can be easily triggered when you work together. For example, parents are used to telling their children what to do. When my father and I first worked together, he’d often commit me to do things without discussing with me and without me even knowing about it. I had a big problem with that. Over time, we worked through this but at first, it was not pleasant. I became better at communicating this issue with him respectfully and he began honoring my authority over my time and areas of responsibility.
- Other family members may feel left out. When you are starting a business, it’s what you eat sleep and breathe. It’s what you and your family member and business partners are excited to talk about all the time. Family members not participating in the business may feel neglected, even if it’s their choice to not participate. And if they weren’t given a choice to be part of the business, there may be jealousy, resentment, and bitterness. They may feel like you’re the favorite and take those emotions out on you or others.
Overcoming The Struggles
You can minimize the impact of the struggles and limit their lifespan with some careful planning. As you begin planning your business venture, take these important steps.
- Talk to other family members. Sit down for a family pow-wow prior to launching the business. Discuss the financial and time commitment realities, who will be involved and to what extent. Allow for a safe, nonjudgmental environment for each person to ask questions, voice concerns and feel heard. Some hurt feelings may be inevitable. If a family member isn’t fit to lead the business, perhaps that person can start as an employee in the company and earn more responsibility over time. You should also set up a succession plan with a lawyer in the unfortunate event that one of you dies suddenly or is disabled.
- Do a strengths inventory. Make sure you’re starting a business that utilizes the unique talents and interests of the participating family members. There are professional strengths inventory tests that aid in making sure each family member is in the right role in the business. Define your similarities and differences and make them a source of strength instead of conflict. Life is so much better when each family member is succeeding in a role they enjoy and feel they have authority within.
- Set some equality standards. In many cases, the parent puts up the money to start the business. The child puts in more time and work. When power struggles arise, both of these arguments are used for positioning. There has to be a time when they even out. If the goal is for the child to assume more ownership of the business over time, designate specific dates and terms under which this will happen. Put it in writing and stick to the plan.
Also, you should integrate outside parties. An advantage of being part of a franchise is having the franchisor providing metrics and operating standards. These are their rules and not yours, and this can alleviate some of the parent-child friction. Lastly, have an advisory board. This can include a CPA, your attorney, financial advisor or business coach. Consider giving your advisory board some voting capabilities around certain business decisions to assist in working through family stalemates.
Advantages of Multigenerational Businesses
Being part of a multigenerational family business isn’t just struggles and hardships. You’re spending time with loved family members and are building your own future. There are some major advantages associated with this. For me, these are the top examples.
You build strong trust. Most children who go into business with their parents have a bond with them already, and that bond was built on trust. If you’re going into business with an old college friend, you may wonder if your business partner will throw you under the bus someday or run the business into the ground. When there’s a strong sense of family trust, you don’t have to worry about that.
You build your own legacy. When you run a business together, you come up with your own plan for success. You build it your way, and that’s something to be proud of. People in the community see it, and parents can use it as an opportunity to be a good example for their kids. Business ownership can also be a vehicle to build financial wealth and security that the next generation can keep and enjoy.
Yes, you can have fun working together! When you build the business carefully and have those difficult conversations beforehand, a family business can be a wonderful environment. Parents enjoy seeing their children working alongside them. It’s a source of tremendous pride and joy for them. I believe I am much closer to my family because of our business than I would have been otherwise. Dad, I know, is thrilled to see me follow in his footsteps and further what we started together years ago.
You’ll ultimately have to jump a few hurdles as you start a franchise with a family member. When there’s a problem, I suggest using Robert Edward Deming’s “Root Cause Analysis” method of asking “why” five levels deep to identify the best solution forward. With determination, a solid advisory team, and choosing the right business at the get-go, you can make your multigenerational family business thrive.
About Leslie Kuban
My family’s story is a wonderful example of how business ownership through franchising allows for a life of freedom, flexibility, and enjoyable work. I look forward to assisting you to write your franchise ownership success story. Contact me at firstname.lastname@example.org and let’s get started!