Why Gen Z is Turning to Franchising for Business Ownership

Small business is evolving as a new generation takes the lead. Many Baby Boomers, who have shaped the entrepreneurial landscape for decades, are moving on to new chapters. As they step away, younger generations — including Gen Z — are bringing fresh ideas, digital expertise, and new approaches to business.

Many young entrepreneurs are turning to franchising as their vehicle for business ownership. According to a recent survey by Guidant Financial, 35% of respondents have launched new franchise locations, leveraging the support and brand recognition of established networks. Another 10% have opted to buy existing franchise locations, aiming to improve and grow these setups further.

Here are four reasons why business ownership is so appealing to Gen Z:

1. They're naturally good at it

Younger generations grew up in the digital age, which lends itself well to the type of marketing and customer relations that are necessary in a landscape that is shifting away from traditional brick-and-mortar businesses.

As an example, Grace Kitchen, just a couple years out of college, is helping her mother run a booming Mr. Rooter Plumbing franchise. Here's what she says about the value she brings to the business:

“The Gen Z generation grew up online, so we’re hyperaware of what feels like a sales pitch versus what feels authentic. We’re marketing to customers the way we want to be marketed to, with transparency and personality and value. … We’ve grown up and been involved so much with the noise and everything, so it provides us a unique perspective.”

2. Freedom

Freedom is always the #1 reason people go into business for themselves. What's unique to Gen Z in particular, though, is that they don’t want to take a job just because they need a job — which is what earlier generations have done. Gen Z is very particular about who they are willing to work for, and in many cases they conclude that that's themselves! Gen Z also cares about community impact and is generally wary of Corporate culture, leading to a realization that they can control those things by aligning with a right-fit franchise model.

3. Legacy

A fresh motivation is emerging in the small business world: legacy-building. More entrepreneurs are looking beyond short-term profits and day-to-day operations, focusing instead on creating something that will last for generations. Gen Z resonates with this vision, as they look to strengthen their community, make a lasting impact in their industry, and build something meaningful that stands the test of time.

And Gen Z is increasingly joining forces with the parents, who are looking to franchising as a way to build legacy as well. Desario Turner, for example, opened a smoothie franchise in 2023 after 18 years in the corporate world and quickly grew it to $1M/yr. in revenue. Her 19-year-old daughter has stepped into a key leadership role at the store, managing day-to-day operations and learning every aspect of the business firsthand. Turner is intentionally mentoring her daughter to one day take full ownership, passing down not just a business but a blueprint for independence, responsibility and generational wealth.

"Ultimately, this is [my daughter's] business," says Turner. "I'm showing her everything now so she understands what it takes — because it's for her future."

4. They desire happiness

Gen Z wants to feel fulfilled in their work, and it turns out that running a business might just be the key to happiness! According to the Guidant Financial survey, happiness is on the rise, with 75% of business owners reporting being "very happy" or "somewhat happy" with their business lives. This is a significant increase from 67% previously.

Amid economic uncertainty and shifting political landscapes, people increasingly want more control over their financial futures — and that is especially true for the younger generations, where business ownership for Americans under the age of 40 is at a 20-year high. That trend is expected to continue, with franchising as the predominant landing spot for young entrepreneurs.

If you'd like to explore good-fit franchise options for your family, we'd love to talk to you!