How the Great Resignation Will Continue to Fuel Franchise Growth

Franchise sales organization Raintree is having a record-breaking year. Not only has the firm seen a 140% increase in year-over-year revenue, but each of the brands it works with has also broken franchise sales records, with overall sales up nearly 100% over 2019 and 2020. While Raintree has been rebuilding its technology and improving its franchise sales process over the past year, CEO Brent Dowling says there are other macroeconomic trends that are likely contributing to this spike in sales, including the biggest 2021 trend of all: the “Great Registration.”

“We all hear, day after day, candidate after candidate, saying: ‘I got a taste of having more control over my schedule during the pandemic. I liked being able to pick my kids up from school, throw a ball in the backyard with them a few times a day. I hate that I’m back in the office.’ Now, since so many people are interested in business ownership but don’t have a great idea to start a brand-new business, franchising has become very attractive to a much wider pool of the population,” Dowling said.

Dowling points to a Harvard Business report that notes four million Americans quit their jobs in July 2021, with the highest resignation rate falling between the age bracket of 30 to 45. 

“This age bracket perfectly correlates with the change in the average age seen for franchise owners — it has lowered by about 10 years in 2021,” said Dowling. “We are seeing more millennials buying franchises than ever before.”

As the average age demographic shifts for the franchising industry, Dowling says Raintree understands that the lead generation process is shifting as well. For example, Facebook has become the second-biggest lead referral source for closed deals, which is likely due to the younger generation spending more of their time on social media platforms.

Still, Dowling says the COVID-19 environment is full of fear and uncertainty for every demographic, which is why more deals are being done with consultants — to guide prospects to the right opportunity. Raintree tells franchisors they need to be sure consultants are in complete alignment with their franchise development team to ensure communication is effective with all prospects. This will instill the confidence that today’s franchisee prospects need to move ahead with the process.

And while franchisee interest may be on the rise, Dowling says there are several new issues that prospects are running into. As a result, certain brands are finding themselves better positioned than others and, more than ever, franchisors need to understand what candidates are looking for.

“Funding continues to be an issue in the COVID-19 climate,” said Dowling. “Banks are more hesitant to back smaller brands with a limited track record. As a result, lower-cost concepts like service and pet brands are becoming more popular. Those franchise brands who have worked hard to streamline their business model and find efficiencies to ultimately reduce their Item 7 seem to be growing faster. There is a strong demand for restaurant concepts, but many of those brands need to work on that Item 7 and target candidates who can fund the business with cash.”

Looking ahead, Dowling says Raintree will continue to navigate the post-pandemic landscape in order to satisfy the increased demand for entrepreneurship, while making sure to help both franchisees and franchisors find sustainable success. 

“At the end of the day, we are looking to fortify our position as the leader in lead generation and ‘ethical’ franchise sales,” said Dowling. “Over the past year, we’ve made significant progress towards that goal as we continue to adapt our systems and procedures in response to emerging trends like the Great Registration and pay attention to how these trends are shaping the future of franchising.”

To learn more about Raintree, visit https://raintreegrowth.com.