Q&A

Q: How effective is franchising as a retirement option?

Tony Marsh
Sales and Marketing Director, Signs Express
A: Franchising as a retirement option has proved very popular amongst our franchisees. With today’s market and the impact of unfruitful pension schemes, workers have been looking at additional ways to plan for their futures and ensure they have secure finances in their retirement years. There are really three main options that we suggest to our franchisees who are planning for the future. The first option is to sell the business once it is a viable asset; we’ve recently had a centre sell for approximately three quarters of a million making it an excellent retirement plan. In some cases we have had franchisees opt to buy their premises prior to retirement, the new owner would then pay rental, therefore creating another form of income.

The second option is to take a back seat once the business is established and hire a new manager or promote an existing member of staff to run the business for you. This could also be an option where the business is kept in the family with the plan to either be handed down to a son or daughter. This would also still leave you with an income.

And thirdly, for those who have taken early retirement, it is sometimes the case that you are simply not ready to retire and still need to be challenged. This could be an ideal time to go into business with a family member where you can become a silent partner but provide the required guidance as and when help is needed.
 

Peter Williams
Franchise Consultant
A: Given the current financial climate in which low interest rates and inadequate pensions often make prospects appear gloomy for retired people, franchising is certainly a possibility that should be considered. We are tending to live longer and stay fitter, and provided one still has the essential attributes of energy, ambition and commitment, there are sound reasons for going into business at a mature age.

From the standpoint of personal experience I would argue that being in business later in life is distinctly preferable to a state of relative inactivity, particularly with regard to financial circumstances and maintaining a good standard of living. Return on investment is always a key issue and especially pertinent when the exit-route timescale may be relatively short, five years being the likely minimum.

In addition to taking a view of prospective profitability from which personal drawings will be taken, bear in mind also the potential worth of a resale when the time finally comes to move on. As with any business, which has performed well, at the end of the day it is not simply a matter of ‘handing back the keys’. A successful franchise has a value and the proceeds could make a valuable contribution to a retirement fund.