What FRANdata Thinks

Athlete Investments in Franchising

June 8th, 2018 by Ritwik Donde

They’ve won trophies and championship rings. They’ve been feted by the press and the public. They have millions in the bank. And now, they are the prime candidate for franchise ownership.

According to a working paper from the National Bureau of Economic Research, 15.7% of NFL players filed for bankruptcy 12 years after retiring. Sports Illustrated, in a 2009 report, estimated that 60% of NBA players go bankrupt within 5 years after leaving the sport.[1] It’s hard to believe that professional athletes, who earn so much at a young age, could possibly end up bankrupt – especially with the size of their salaries and the guaranteed money in today’s sports business climate.

There are several business opportunities that ex-professional athletes can take on to supplement their income. Over the past few years, pro athletes have increasingly gravitated towards franchising as a means to create a safety net for their investments. At the same time, many franchisors have made recruiting former players a part of their game plan for expansion, hosting seminars and networking events and offering support to get the stars up to speed on running a business. The recruiting push from franchisor is largely a result of the recent recession, after which banks had to tighten their lending standards. Franchisors have increasingly found that pro athletes bring strong financial backing to the table during the franchise selection process.

Here are a few reasons why we believe franchisors are attracted to pro athletes as franchisees:

  • Athletes have learned to follow a “play book” to be successful. Franchising business model is just like that of pro sports. A proven “playbook” i.e. operating manuals when executed properly lead to predictable and successful results.
  • Athletes are “coachable”. Franchising provides a lifetime of training and support to deliver predictable results through a proven business model and the ability to enjoy higher levels of success by receiving the training (coaching).
  • Strong leadership qualities. On the job, players can be good leaders and motivators, and are used to working within a team.

However, the biggest challenge franchisor face when recruiting such high-profile franchisees is to better manage their expectations because a lot of players have a checkbook and open it up without knowing what it takes.

List of famous pro-athletes and their franchise investments:

Brand Name Pro Athlete Franchisee
Auntie Anne’s Shaquille O’Neal is a multi-unit franchisee in NY and Detriot
Title Boxing Club Bryan Scott, a former NFL linebacker, is a multi-unit franchisee
East Coast Wings & Grill Quetin Richardson has a 10-unit deal with the franchisor
Firehouse Subs Don Davey, former Defensive Tackle for the Green Bay Packers is a multi-unit franchisee
Popeyes Louisiana Kitchen Hank Aaron is a franchisee
Tropical Smoothie Café Everette Brown, former linebacker for the Dallas Cowboys is a multi-unit franchisee
Juice It Up Former college basketball player, Brooklynn Lorenzen is a multi-unit franchisee
Jimmy Johns NFL quarterback Drew Brees is a multi-unit franchisee, owns five Jimmy John’s locations
Jamba Juice Tennis player Venus Williams owns four in the DC market
Pie Five Pizza Former NFL player Billy Bajema, along with his college teammate is a franchisee
Five Guys Professional golfer Phil Mickelson own multiple stores in southern California
Papa John’s Denver Broncos quarterback Peyton Manning owns close to 25 units in Denver
Wendy’s & Chili’s Ex-NBA player Junior Bridgeman owns close to 200 Wendy’s and 125 Chili’s locations
Title Boxing Club Former NFL linebacker and NFL Player of the Year, Bryan Scott owns five units in and around Atlanta
i9 Sports Keith Smith, former NFL cornerback for the Detroit Lions
Dunkin’ Donuts Tony McGee, former NFL Cincinnati Bengals tight end and Greg Lansing, current men’s basketball coach at Indiana State University.

[1] 1851 Franchise Magazine

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