Death and taxes- they say they're the only guaranteed things in life. There's not a whole lot (of legal things) we can do to avoid taxes, but for franchise owners, death is at least something we can plan for.
A recent article in Entrepreneur deals with the tricky issue of franchise succession. They quote stats from the IFA which claim that only "30% of franchises are passed down to the second generation". The major reason for this, Entrepreneur writes, is that "the franchisor has the veto power and is the sole decider as to whether Junior is qualified to step in as boss".
In the beginning days of franchising, this was not a controversial issue but over the last decade, it's become quite a contentious point as children want to take over what they see as a family business.
It seems that, at this stage, succession is a matter that varies tremendously depending on the candidate. The Entrepreneur story quotes a family who easily transferred their Fastsigns franchise to their children, but also outlines the three-year struggle a prospective McDonald's franchisee had in taking over a parent's business. It can be a hugely complicated process, which emphasizes the need to tackle succession as soon as possible.
Ultimately, each franchise owner will have to sit down and draft that succession plan on their own time. It's a little depressing to confront our own mortality but it's ultimately a wise thing to do, especially if your son or daughter has expressed interest in taking over the franchise. (The Entrepreneur story also outlines the right steps to drafting a succession report, so we recommend you start there)