Franchising for Professional Athletes

By Heidi Bohi

The average professional athlete makes lifetime earnings of between $5 million and $25 million. Roughly 70 to 90 percent of that is earned before they reach 35 and by the ripe old age of 40 their careers have usually ended. As an example, the average NBA career lasts 6.2 years and for NFL players it’s half of that. Although most of these don’t come close to being in the same income bracket as the likes of professional golfer Tiger Woods—who is the first $100 million man in sports and is expected to break the billion dollar barrier by 2010—there are thousands of professional athletes who earn what are considered, by anyone’s standards, remarkable salaries for the talent and skill it takes to hold a .300-plus batting average, rush 1,000 yards, or serve a fuzzy yellow ball at 155 miles per hour.

But making this kind of money and making this kind of money last are two different disciplines. For every athlete who invests their money wisely, there are the too familiar stories of those who did not have sound financial counsel only to find themselves scrambling to make ends meet in their post career: the NFL Players Association estimates that more than 80 players were defrauded of more than $42 million between 1999 and 2002 alone, 78 percent of all NFL players are out of money or are jobless two years after they stop playing, and 25 percent who have played for three years or less are bankrupt within one year after their career ends. In a profession where being traded, cut, or suffering a career-ending injury is all part of doing business, preparing for the unpredictable nature of professional athletics by carefully shaping their lifestyle is critical to making sure something is left of their million dollar incomes.

Recently, as more and more professional athletes are looking at ways to protect their long-term financial futures, they are becoming increasingly interested in the franchise business model. For current athletes, especially, buying a franchise does not mean buying a job: they are simply looking for an exciting investment that offers the rewards of entrepreneurship, but requires minimal involvement in the business so that they do not have to leave their current professions. As a result, a group of current and retired professional athletes approached Iron Mountain Sports (IMS), a leading sports marketing agency that represents professional athletes with major corporations and associations, to find out how they could learn more about franchising business opportunities. IMS collaborated with Upside Group, a full-service franchise consulting company known for its business coaching in the industry, and as a result, for the first time in the history of franchising, the two companies are co-hosting the first annual Franchising Expo for Professional Athletes, June 27-29, 2008, at the Bellagio Resort in Las Vegas.

The purpose of the Expo is to connect franchisors with current and retired professional athletes who want to learn more about the advantages of franchising. Once word spread among athletes and their agents, the attendance had to be capped at 100. A select group of about 30 leading franchisors will be handpicked to present franchise opportunities to this group of professional athletes interested in becoming franchisees. Real estate and financial experts will also be on hand to answer the athletes’ questions.

In addition to providing an educational forum and series of one-on-one networking opportunities, the Franchising Expo for Professional Athletes is being developed to encourage a marketplace-style venue that encourages franchisors and attending athletes to leave at the end of the three-day event prepared to sit down and do business. Athletes are helping direct the expo by requesting specific franchisors they want to be present and IMS and Upside Group will help act as matchmakers.  To date, franchising industries that will be represented are food— including new and unique concepts in the restaurant industry—senior care services, personal care services, sports and recreation, enrichment learning programs for kids, beauty, healthcare and the service industry.

“It is exciting for the franchise industry that such a prestigious group of pro athletes is interested in the franchise industry and that they are seriously looking to invest as franchise owners because it can be a healthy financial investment and a stable place to invest for years of equity growth,” Mario Altiery, Upside Group President and emcee for the event says. “The Expo will be especially pertinent for those franchisors who have stringent financial requirements including net worth of high amounts and minimums of liquid assets to be considered.”

Because the restaurant franchising industry has extensive operations, requires heavy capital, and relies on a familiar team approach, it is one of particular interest to professional athletes who want to take an active role in the business, and depending on the type of restaurant and their personal priorities, also to those who prefer to be a behind-the-scenes investor. Few individuals who have the resources to make large financial investments typical of the restaurant industry, while also operating the business, so more and more the industry is seeing those such as professional athletes joining investment groups, which in turn purchase the franchise rights for one or more units. This is the type of information that will be discussed at The Franchising Expo for Professional Athletes, Altiery says. Seminars will also discuss the history and growth of the franchising industry, the advantages and disadvantages of franchising instead of being an independent business owner, how to finance these enterprises, legal considerations and real estate selection.

For more information on the Franchising Expo for Professional Athletes, or to find out about franchisor sponsorship and corporate presentation fees, call Upside Group at 1-877-664-4747 or email salessupport@upsidegroup.biz.

Heidi Bohi is an advertising associate for Upside Group, an award-winning franchise marketing consulting firm.