When it comes to succession planning, don’t wait until it’s too late to start.
That’s the main takeaway from Christopher Flis’ presentation on succession plans at the annual Restaurant Finance & Development Conference in Las Vegas. Flis shared his own story in which his parents died earlier than anticipated, leaving their Burger King franchisee operations to Flis and his brother.
“Our succession plan, which we thought was going to be some years in the future, snapped into place,” Flis said.
Flis is a financial planner and the founder of Resilient Asset Management, a Memphis, Tennessee-based financial planning firm. He’s diligent about his own succession plan and working with others to create their own.
“I sleep very well at night with this structure,” Flis said, referring to his current succession plans.
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Procrastination is an easy habit to get into, but when it comes to succession planning, franchisees should think twice about pushing it off, Flis said. Succession planning is often overlooked and takes longer than most anticipate.
The first step is determining what you’re going to do with the company, should you die, retire or become disabled, Flis said. “This is a pretty extensive process,” he said.
Continuity planning is essential. What happens to the business if you’re out of the picture? A franchisee could have their children take over so things run as usual, or maybe the business will close down entirely while transitioning ownership. Either way, there needs to be a plan in place for that, Flis said.
The next part is access to capital. For instance, how the company is paying to transfer ownership and keep the business running during a transition of power. This can involve retirement accounts, liquid cash and life and disability insurance policies.
Another factor is access to knowledge and devices. When Flis’ father died, his family didn’t know his access information for his computer and other devices, which held important company information.
“Make sure that your business is able to sustain itself,” Flis said.
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“I don’t know what’s gonna happen in the future,” Flis said. “What I do know that sometime between now and later, we’re going to have a recession and we’re going to have prosperity. … So, I need to persevere in all those different situations. Right now, we are where we are because we don’t want to get caught in that position.”
The Restaurant Finance & Development Conference, presented by the Restaurant Finance Monitor, Franchise Times and Food On Demand, runs Monday, November 13, through Wednesday, November 15, at the Bellagio in Las Vegas.