Worried about starting a new business? A franchise is less risky than creating a company from scratch.
Steve Huff was a high-achieving Citibank executive, supervising half of the corporation’s New York City branches. In late 2005, a corporate reorganization eliminated his job. Although he was offered another post, he decided to work for himself.
Despite entrepreneurial yearnings, Huff, 56, describes himself as risk averse. He wanted to own a business that already was generating cash. So he hired a franchise broker who helped him to evaluate several companies. In mid 2006, he used savings and stock options to buy 2 existing Sylvan Learning Centers in Yonkers and White Plains, N.Y.
Huff says the tutoring programs for students from kindergarten through high school were consistent with his desire for a business in a professional setting. Before signing on, Huff spoke with ten other Sylvan franchisees as well as firms that compete with Sylvan. He decided against opening up a new center, and instead opted to buy existing operations. ‘They already had a track record, existing customers, cash flow and the opportunity to hit the ground running,’ he says. His wife, Kathy, manages one center.
Huff is one of many retirees who have left corporate America for careers in franchising. Like Huff, these corporate expatriates want to go into business for themselves but with less of the headache and risk of starting a company from scratch.
About 760,000 franchise businesses generate more than $1.5 trillion in sales, according to the International Franchise Association, a membership group of franchisors and franchisees. Many are brand names-Radio Shack, Comfort Inn, McDonald’s, H&R Block and Curves.
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