Downsized? Franchise vs. Corporate Employment

Pink slip? Thinking of a franchise?For those of you that are thinking about becoming a franchise owner this year, it’s essential for you to dig deep into your own psyche, and make sure that you are investing in a franchise, or even a non-franchise business, for all the right reasons.


That word is becoming more common to more people in this choppy economy. The recent unemployment numbers tell the real story. Companies are lowering their revenue expectations, engaging in major cost cutting moves (which is a nice way of saying that they are cutting jobs), and are basically battening down the hatches, for awhile. (Joel, tell me something I don’t know!)

I am starting to see some interest in franchise/small business ownership options from downsized middle managers and executives, but it just feels different than the last recession. Folks are a lot more cautious, currently, and seem to be on somewhat of what I call a dual track; some of their energy is being used towards finding a traditional job, and some of their energy is being spent on non-traditional career options such as business ownership.

I generally don’t recommend this way of doing things.

I feel that you either want to be a business owner, or you don’t want to be a business owner. It shouldn’t be, “Well if I can’t find a job, I’ll just buy a franchise.” There tends to be so much self-inflicted pressure when launching a new business. Doing so because you can’t find a good job may add even more pressure.

I have found that almost all of the folks that I have been able to help place into franchises of their own have focused 80% of their time on finding opportunities in business ownership. They have pretty much made the decision to move away from a corporate career, and really want to do something on their own.

Some people that I meet tell me that they are really fed up with the corporate life. (For more, check out this poll showing a decline in job satisfaction.) Some people are fed up more than others.

Jonathan Fields, author of a book titled “Career Renegade” writes:

“At some point, it dawns on you that the corporate ladder is really more of a treadmill. You run faster, work harder, climb-higher, sweat more blood and push through stifling fatigue. But, in the end, all too often, you’re no freer or happier than the day you began. In fact, for many, as your lifestyle expands to gobble-up nearly every dollar you make, it’s quite the opposite. The day-to-day stress, relentless posturing, politics, negotiating and hours spent on minutiae increasingly suck the life out of you. Body, mind and spirit, slowly and methodically being sucked dry.”

Jonathan and I have two things in common.

1. We work for ourselves.
2. We tend not to sugar coat things.

I remember my dad coming home from work early one afternoon, with a look on his face that I hadn’t seen in awhile. His face revealed the combined feelings of sadness, anger, frustration, and fear, for all of us to see that day. He had been downsized. Again. For those of you who have ever been downsized, I’ll bet you remember your feelings the day it happened to you, too.

That was dad’s last downsizing. It happened in 1990. A couple of weeks later, he made the decision to forgo a job hunt, and started to seriously look into starting a franchise consulting business. He did.

My last downsizing was in 2001. I remember everything about that day. I was a little more confused than my dad, though. For me, I knew what I didn’t want to do anymore. I just didn’t know what my next adventure would be. My dad convinced me to join his firm, and eventually that year, I did. I now own it. (My dad passed away in 2007, from lung cancer.)

If you have been recently downsized, and are at the point in your life in which you feel a corporate job just isn’t the place for you anymore, get out of your comfort zone, and look at some non-traditional opportunities:

  • It may be a franchise business. Franchises are a great way to get into a business that has a blueprint all ready for you to use.
  • Maybe you would like to find a small company that needs some fresh ideas. Work out something with the owner of that company, and get some equity in the company.  Maybe arrange to buy the owner out, someday.
  • Are you a specialist? Consider becoming a consultant in your field of expertise.

If you have been downsized, and are comfortable with the corporate life, congratulations! Opportunities abound. You just have to look for them in a different way. Get out of your robe, and get out of the house. Attend an ExecuNet meeting. Meet someone new for lunch a couple of times a week. Use resources that can still be found at your local library. Get on LinkedIn.

Whatever you decide to do on your next career adventure, do it for all the right reasons.

* * * * *

Joel Libava on 2008 franchise trends About the Author: Joel Libava is President and Life Changer of Franchise Selection Specialists. He blogs at The Franchise King Blog.


Joel Libava

Joel Libava Joel Libava is the Franchise Expert for Small Business Trends. Joel, The Franchise King®, equips today’s prospective franchise owners with time-tested, proven techniques designed to increase odds of success. He does this through one-on-one coaching, and gobs of useful content that can be found on places like Small Business Trends, SBA.Gov, and his award-winning franchise blog, The Franchise King Blog . He’s been featured in Entrepreneur® magazine, and is frequently called upon by national media outlets and publications for his no-spin insights into the world of franchising.

26 Reactions

  1. Joel,

    Great post! Have you seen much more interest in franchising beginning this year than 2008? What’s the main event for people interested in starting a franchise? Could you make a list of fairs and events?

    What’s ExecuNet?

  2. Hi Martin,
    I AM starting to get a little more interest in franchising than I did last year. It may have to do with the #s. Massive layoffs in the US continue. has a link to upcoming franchise expos.

    ExecuNet is an executive networking organization for downsized middle managers/execs making $100k+ a year.

    I have had the privilege of presenting my seminar on franchise ownership possibilities to the Cleveland, Ohio area Execunet group for years, and have been able to help a few of their members find great opportunities in franchise ownership.

    It is a very well organized group, and takes things seriously when it comes to helping it’s members find career opportunities.

    As usual, thank you so much for taking the time to read my articles on franchise ownership, and for asking terrific questions, Martin.

    The Franchise King
    Joel Libava

  3. Joel,

    Thanks for your answer. It would be fun if I could attend a franchise expo when I am visiting America.

    Talking about time, if you have time, take a minute and check out my new post on Open Forum! I think you will get a kick of Dr. Eliyahu M. Goldratt’s view! 🙂

  4. You have to have a high degree of commitment to run a business, to get through all the challenges. If you’re still in “when do I get my paycheck?” mode, you’re likely to give up at the first sign of adversity. You’ll be doomed to failure, I think.

  5. Anita,
    Thank You! That is exactly one the things that I talk about during my many franchise presentations.

    The key to becoming a business owner,is the willingness to experience some short term pain {No paycheck} for the opportunity of long term gain. {A paycheck, AND some equity}

    The Franchise King
    Joel Libava

  6. Hi Joel,

    When can you say that this certain person qualifies to franchise a business?

  7. Mary Grace,
    A person is qualified to become a franchise owner if:

    1. They have a pretty good net worth
    2. They have about $50k liquid
    3. They have the right personality-check out
    {It’s FREE}
    4. They are really willing to follow a system
    5. They have their spouses-partners support
    6. They are willing to sacrifice some immediate income, for an opportunity to create equity.

    Those items are a good start…

    The Franchise King
    Joel Libava

  8. Great article. I like your posts because you don’t sugar coat franchising. You make it really clear that it’s still a lot of hard work and very demanding. Thank you for your no nonsense approach.

  9. GREAT ADVICE – business ownership is not for everyone. Better to know up front than find out after it is too late.

  10. Thank YOU, Amanda, and techguy.
    The Franchise King
    Joel Libava

  11. Joel,

    Thank you. 🙂

    Mary Grace

  12. Joel, this is one of the best pieces I’ve seen on making the decision related to a small biz or a franchise. Thanks. I went through a lot of soul searching a number of years back and considered buying a franchise.

    I didn’t take your quiz, but one like it. I’m sure yours is more focused and on target than the generic thing I took from the SBA (no slam meant on the SBA, they are great).

    I found being a consultant was more my style and fit my long range plans. But like Anita says — its no cakewalk. I’ve been self-employed for most of the last 20+ years. Its been easier and its been harder. But my wife only has to say one thing to make me let go of the brakes and hit the accelerator.

    “Well, you could always just go out and get a job…..”

    Then I remember that owning all of my little co is better than not much of someone else’s co.

  13. T. J.
    In keeping things simple, let me say this:

    I love working for myself.

    The Franchise King
    Joel Libava
    {Thank you for the compliment. We must bond . And soon.

  14. Hi

    We’ve been in the coffee business since 1992. We have no debt, we’ve reinvented our product making the healthiest coffee in the world. Our coffee is totally undadulterated. We have been extensively vetted and sold over $25 Million dollars worth in the last 16 months of the 1990’s. We are seeking new, young, potential sales managers, area representatives and corporate personnel. Everyone in our company is an owner. We are opening up to new investors for the first time in over 15years. The Deal. Invest minimally $1,000. – sell local health food stores or use your contacts and we’ll make the sale. You become our Partner sharing 50% of the gross profit derived from that account for as long as they continue to buy. Everyone will share in corporate gross profit distributions from ten percent of our gross profit based on our obtaining 100 New Participants. Starting this Fall, you can develop business in your state as our Limited Partner – depending upon your performance until then. No additional investments required. We will support everything having to do with the Roasting through delivery to your customer. Read our Approvals and What makes us a Healthier Coffee

    Michael Reines

  15. Hey Joel,
    I was thinking of you today when I read Seth Godin’s piece late last year over at OPEN Forum. He talked about the differences between a freelancer and an entrepreneur.

    Your post reminds me, and potential franchise owners, of the differences between being an owner and being an employee. It is important to know the difference and decide how you want to be compensated.

    Here’s his post, if you’re interested.

  16. Oops. Posted the wrong link, but that down market post was excellent too!! 🙂

    Here’s the freelance piece:

  17. I’m a bit late to the party, but thanks for the mention. The great thing about consulting is that there are low barriers to entry, if you just want to try it out. But, by building up your expert status, you can then raise those barriers to entry for your competitors, once your’e ready to pursue a full-time business.

  18. LookingforFranchise

    Thank you for reminding me of that great quote in the Career Renegade. I did read that book. I’m currently spending 98% of my time looking for a franchise versus another corporate job. It’s tempting to put that quote in my facebook profile. I should probably wait until I have a new business since my current boss is a friend on facebook. Good article as well.

  19. My company has been in an expansion mode with a franchise like program. Key ingredient to success for any body wanting to jump in, Realizing you are no longer an employee and it is going to take working harder and smarter then you ever have to succeed.

  20. Thanks for the link!

    You’ve given a great overview here about business ownership.

    But I have to disagree with your position on running a business part-time. Sometimes, life gets in the way of our dreams. Kids, retirement savings, mortgages, relationships and other considerations may prevent someone from making the leap to f/t business ownership. Some people wouldn’t get into business at all, were it not for the opportunity to learn and practice on a part-time basis. Starting and running a business is a process and I think it’s okay to do it a bit at a time. However, there may come a time when you have to choose between keeping the business small and growing it bigger. It comes down to your own needs and values.

  21. My company has been in an expansion mode with a franchise like program. AtWork beats the industry average of talent and client satisfaction by at least three times more than the next business. This unbeaten track record allows AtWork to shine and prove how we are indeed one of the very best staffing franchises in the nation.

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