The EU statistics office Eurostat has released the latest Eurozone unemployment rates and the results are at a record-breaking high, with the youths (under 25) being hit the hardest. While unemployment is far worse for young people in Greece than here, when we compare Ireland’s under 25 unemployment rate of 27% to the national level of 14%, it shows that our younger people are far below the nation’s average. This difficulty in finding a job makes the idea of self-employment – and being a franchisee – suddenly much more appealing to young people.
Unemployment rate averages February to May 2013:
Why Youths Are Good and Bad for Franchising
Like most age groups, under 25s have both advantages and disadvantages for being franchisees. What they lack in money and
experience, they may balance out with enthusiasm and support.
Money – or lack thereof – is the biggest obstacle to overcome. Few youths have the capital or personal guarantees required to pay for a franchise’s minimum investment, or to live off for the first year. However, there are many sources to turn to:
- Government-funded schemes – the Back to Work Enterprise Allowance and Short-Term Enterprise Allowance schemes aim to help people who are currently out of work to become self-employed. Usually the applicant must have been receiving Jobseeker’s or another allowance for a certain amount of time. The Microenterprise Loan Fund Scheme may provide loans of up to €25,000 for small, startup businesses who have been refused credit from a bank, and financial support is also available from the County & City Enterprise Boards.
- Banks will normally fund a high percentage of the start-up cost of a franchise that has a good, well established name. Ulster Bank claims to have a “strong tradition of supporting franchise customers,” while Bank of Ireland has a specific Franchise Unit. If an SME borrower has had their request for a loan refused by a bank, but still feels that he or she has a viable business proposition, they can approach the Credit Review Office who will conduct an independent review. The Office overturns the banks’ decisions more than 30% of the time.
- Friends and family may also be willing to provide the financial resources for recognised franchises; especially parents who realise that supporting their child while they set up a franchise will actually cost a similar amount to sending that child on a post-grad. course for a year. It could even result in some profit!
Speaking of the classroom, while youths may not have much experience working in the world of business, they are highly educated in comparison to previous generations, and they know well how to use a computer. Combine this with fresh ideas and enthusiasm and franchisors may be willing to overlook the lack of commercial knowledge. Indeed, a lack of experience can be an advantage to franchisors, as young franchisees may be less likely to challenge the successful franchise system and more willing to follow instructions.
Particular Franchise Industries to Consider
Certain franchises are particularly popular amongst the under 25s:
00000181-7b54-d6a8-a1e5-7b75c2250002 Internet – information technology is at the core of any business, and for those who have grown up with computers and social media, here is a chance to apply their love for it to a world with a growing demand for IT professionals and trainers. Above all, it usually requires little more investment than a laptop and an internet connection.Pet franchise – pets are incredibly popular in Ireland and there are pet products and services franchises currently on offer.
Sports – outdoor, personal training, children’s fitness…sporting fans who don’t want to sit at a desk all day can run a business in anything from golf to gym. Recent surveys have revealed that three-quarters of adults have engaged in some type of sport in the past year. That’s quite a big market.