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Q&A: Succession Planning for an Ongoing Venture

QUESTION: Do you have a retirement/succession plan? If so, how was it created?

Randal Petrie owns and operates three One Hour Heating & Air Conditioning, Benjamin Franklin Plumbing, and Mister Sparky electric franchises serving the middle Tennessee region.  He serves 77 ZIP codes or about 5,700 customers. Find him at fransocial.franchise.org.

Randal Petrie owns and operates three One Hour Heating & Air Conditioning, Benjamin Franklin Plumbing, and Mister Sparky electric franchises serving the middle Tennessee region. He serves 77 ZIP codes or about 5,700 customers. Find him at fransocial.franchise.org.

“At 66-years-old, my goal is to provide an income in retirement and have a successful business that one day my grandchildren can own and operate. I started in the heating, ventilation and air conditioning industry more than 20 years ago. I was a minority shareholder and then bought the majority share. I became a multi-unit franchise owner as a strategy to grow the business.

My retirement and succession plan involves my son-in-law. He started working for me as a plumber’s helper in 1993. He worked his way up through the company and grew up in the services business. I promoted him from service technician to operations manager and then to general manager. He knows the business well and I feel confident in his ability.

He was a minority owner and over time I have increased his responsibility and ownership levels. We complement each other well. He is very ‘hands-on’ and technical. I handle the business, marketing and financial side of our operations. My plan is to continue to operate the business for a few years and then pass the ownership of the company on to my son-in-law and daughter.

As part of the succession plan, when I became sole owner of the company, I purchased a term life insurance policy. If something were to happen to me, a new owner (my son-in-law) would be able to buy my stock from my heirs and then be the majority owner of the company. The policy would also provide for my wife.

I feel confident knowing the company I have built will be in good hands upon my retirement and my successor already has years of experience running the business on all levels.”

George Ramage and Kristin Worthington own five Home Helpers franchises and three Direct Link franchises serving Greater Cincinnati, Ohio, and northern Kentucky. Find them at fransocial.franchise.org.

George Ramage and Kristin Worthington own five Home Helpers franchises and three Direct Link franchises serving Greater Cincinnati, Ohio, and northern Kentucky. Find them at fransocial.franchise.org.

“Through our seven years of franchise ownership, we have been consistently mindful of our succession planning and exit strategy development.

The two primary concepts that drive our planning include the future goals of the owners and our industry’s life cycle. From the beginning, we have tried to build our business in a way that will bring value when it is time to sell, as we develop talent within our organization so that the company can exist independent of us as owners.

Much like yearly business plans, we believe retirement/succession development should be a living, breathing document. Senior care is currently experiencing rapid growth and expansion. By being mindful that every industry matures and by keeping an eye on this life cycle as it relates to value is one of the keys for us in developing our succession plan.

Because our ownership is 20 years from typical retirement age, the individual long-term goals of owners must be considered. While starting a franchise business from the ground up feels like riding a roller coaster, we have tried to set out a strategy for maximizing the value of our business while laying the foundation for the organization’s success as an ongoing venture.

Ultimately, having yearly discussions about where our industry is as a whole and how that concept relates to our goals as individuals, we believe that these two concepts will guide successful short-term business planning as we maximize the value of our business throughout the lifec ycle.”

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