By John W. Daniels Jr., Dan Janssen and George E. Koonce, Ph.D.
For decades, professional athletes have faced the challenge of transitioning from their sports careers to the business world. On its face, it would appear they have many options, but the right opportunities are less plentiful. Ex-sports stars in the media and athlete endorsements are highly visible, yet some studies say that less than 0.5 percent of athletes have historically been able to make a successful transition to a new business career.
One promising area that has been of particular interest to many athletes is franchising. Indeed, many athletes may find franchising appealing because it can be a bit like team sports: It entails a rigorous system of rules; the franchisor functions like a coach, detailing the system the team will use to succeed; and the franchisees represent team members who must each properly execute their role so the entire team can win. Even so, approaching this field can be overwhelming to even the most dauntless of champions. Because franchising is such a broad area, involving literally hundreds of industries and thousands of brands, the challenge for the athlete is to zero in on the right opportunity — not all franchises are right for everyone, and former professional athletes must consider additional factors, often unique to each of them, in order to leverage their recent careers to greatest advantage.
To Thine Own Plan Be True
Before embarking on a new career in franchising, the enterprising professional athlete should begin, of course, with a bit of self-evaluation and consider a few questions:
Why are you interested in franchising? It’s important to be involved in your franchise because you want to be involved. For example, some prospective franchisees consider themselves entrepreneurs and feel stifled by the often-rigid demands of the franchise contract — as a franchisee, you’re pursuing someone else’s business model, not your own.
What industries interest you? There will be no end of “exciting opportunities in the XYZ field,” and franchisors are very good at looking very attractive. If you don’t have a passion for food service, then a pizza franchise may not be right for you, regardless of potential returns on investment. And if you’re still playing the game, you might not want to invest in one national fast-food chain when another is your team’s or league’s official sponsor. The options for franchising are staggering, so do some research and find the options that truly excite you.
Are you a hands-on or hands-off kind of businessperson? If you are considering investing in a single-unit franchise (i.e., one store), you not only need to be hands-on, you need to be prepared to work the counter for 12–14 hour each day, so something like that is not ideal if you are still playing and/or don’t want that kind of demand on your time. If you are interested in multi-unit deals, it might be more appropriate to be a “silent investor” or non-operating partner.
Talk to Your Friends Who’ve Been There
Serena and Venus Williams are franchisees. Hank Aaron is a franchisee. Shaquille O’Neal, Kevin Faulk, and Phil Mickelson are franchisees, and the list goes on. If experience is the best teacher, then some of your team mates and professional peers can teach you more about franchising than anyone.
The Industry Wants You To Be Informed, Too
Check out the IFA, the International Franchise Association, and the PAFI, the Professional Athlete Franchise Initiative. You’ll find information about selecting the right franchise for you, opportunities available in different areas, training, and countless other resources. Chances are you’ll become a member of both organizations, if and when you become a franchisee, but they don’t make you join in order to learn an awful lot about the field first.
Find the Right Franchise Legal Advisory Team
Most professional athletes have agents who are exceptionally talented in providing advice involving contracts, media appearances, endorsements, and the like, but franchising is an entirely different universe, governed not only by a set of complex laws but controlled by a set of franchise documents that, in most instances, are not designed for franchisees with the attributes of a professional athlete. Just as you wouldn’t make a professional move without your agent, never act without advice from your franchise attorney.
Consider a Business Partner
Even those athletes who intend to make a full-time career of franchising should seek an experienced business professional to help them manage their new assets. Without a formal business education, even the most basic tenets of business operations may escape an inexperienced franchisee. Just as your legal advisor will help you recognize the implications of the contract fine print, your business advisor will keep you abreast of a thousand operational details that only seem obvious in hindsight.
John W. Daniels Jr. is the chairman of Quarles & Brady LLP and a trusted business advisor to professional athletes, having assisted several in their post-sports career transitions; Dan Janssen is the national head of the Quarles & Brady Franchise Law team; and Dr. George Koonce is a former NFL player and now director of development at Marquette University.
