Why Government Employees are a Great Fit for Franchises

Marshall Reddy

According to some estimates, more than 250,000 federal employees in dozens of agencies have had their jobs eliminated. Since federal funding pays for programs in every state, many government contractors and workers in grant-funded agencies will soon be out of work. As is true of every dramatic shift, this massive reduction in force provides an opportunity for displaced government workers to explore other options. Business ownership might be one.

First, let’s dispel some mistaken ideas about who and where government workers are. They’re not all policy wonks working in Washington, DC. According to publicservice.org, “the vast majority of the roughly 2 million federal career civil servants—more than 80%—work outside the D.C. area, in every U.S. state and territory. Employees in the field do much of the day-to-day work of delivering on the mission of our government. They care for veterans, support farmers, inspect roads and bridges, protect the food supply and respond to disasters.”

So most of the people who work for the federal government work in your communities. They probably have partners or spouses who work in local companies. They know the local market and understand what it needs and wants. That makes them great candidates for becoming franchise owners.

Franchisees come from diverse backgrounds, including corporate careers, business ownership, and military and government service. In fact, people who have worked in highly structured environments do well as part of a franchise. People who have been successful in corporations or large organizations like the military thrive where they have both independence and support from a successful corporation. They have a proven model for success limited only by their own effort.

When many people think of owning a business, they visualize a startup, and they’ve probably heard a lot about how hard it is to succeed. The average success rate is not encouraging; 94% of U.S. startups fail within 5 years. Even a business that’s not a startup has a strong risk of failing: 20% fail during the first year, 50% by year 5, and nearly 66% by year 10. Those aren’t great odds, no matter how smart and hardworking you are. 

But there are dozens of business models that rarely fail: laundromats (almost 95% success rate), self-storage facilities (97% success rate), vending machine routes (90% success rate), and last-mile delivery services (76% success rate.) Fast food will always be with us, and franchises like packaging and printing stores and auto repair shops are always going to have a built-in market for their services. 

Franchises look for people who understand processes and guidelines; people with leadership skills and who know how to stick with a good opportunity. (Most franchise agreements are for 10 years, so someone with a long career in the same organization is an attractive prospect for a franchisor.) 

That’s why I’m in the franchise space. Franchises offer a proven business model that can be scaled up when the owner is ready. The franchisor provides training and support, including marketing and peer-to-peer mentoring. The performance of the business is disclosed and fully transparent (by law) for the buyer, and buyers are welcome to (and encouraged to) contact current franchisees and those who have recently left the business to get their advice and perspective. 

Franchises have a 90% success rate overall, because they’ve already proven that the business model is profitable and meets the needs of their customers. Prospective owners are carefully screened and required to spend some time inside a franchise unit before being approved for a purchase.

There’s no such thing as guaranteed success, but choosing ownership within the right franchise comes pretty darn close. If your job or your funding is on the cutting block, take the franchise assessment. There’s no obligation to go any further, but you’ll be able to see that there’s another road available for you to travel this year.