This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

5 Sports Stars Buying Franchises as Their Next Play

Stocks in this article: PNRA JMBA

NEW YORK ( TheStreet) -- For all the glitz and glory associated with being a sports star, the sad fact is that many professional athletes have short shelf lives. And once the last ball is thrown or layup made, endorsements are quick to fizzle.

Sports stars have notoriously been known to blow their earnings, either from aggressive agents who advocate investments that promise high returns or from their own extravagant lifestyle spending on cars, cribs (as in homes) and bling.

A 2009 Sports Illustrated story highlighted that just two years after retirement, 78% of NFL players "have gone bankrupt or are under financial stress because of joblessness or divorce." Further, within five years of retirement, "an estimated 60% of former NBA players are broke."

Sports associations are looking to guide their players into more stable careers once they retire. And professional athletes are increasingly betting on the franchise industry as a safe place to invest their money.

As bank credit remains elusive, the franchise industry is encouraging more players, with large checkbooks at their disposal, to sign on. While they may not take food orders or man the grill, there are a host of former players behind the scene.

"It's an untapped market," says Miriam Brewer, the senior director of education and diversity at the International Franchise Association. "Granted, there are growing numbers of athletes already in franchising. If we can reach players while they're still playing, they come with the financial backing. They're not going to have necessarily go through a bank or try to get an SBA loan. They have the resources to do it."

Still, the business of franchising was little known to many stars. Not anymore.

Besides working with the NFL Career Transition Program and the NBA to promote franchising, the IFA last year launched an effort with the Professional Athlete Franchise Initiative, or PAFI. The two-year-old organization, founded by former NFL cornerback Michael Stone, considers itself a liaison between franchisor and athlete and an education resource for athletes.

"Our goal is to educate athletes about franchising as a potential second career," Stone says. "We like franchising as opposed to pure entrepreneurism because it gives the athletes a little bit of coaching along the way and a support structure," which is similar to that of the sports world.

Last October, the IFA and the PAFI created a formal franchise education platform designed to attract prospective franchisors. The athletes who completed the PAFI Franchisee Education Program and became franchise owners would also receive credit toward a Certified Franchise Executive (CFE) designation, which is administered by the IFA Educational Foundation.

Still, when it comes to choosing a brand, Stone says it's a personal decision. The PAFI stops short of pairing franchisors with athletes. Athletes tend to choose brands that fit their lifestyle and budget.

The PAFI and IFA are now working to promote franchises other than restaurants as well as to other sports professions and women athletes.

"Our whole goal is to help athletes manage their expectations to understand what it means to be a franchisee," Stone says. "If you ask any American to name five franchises, four of them will be food. As we get more involved, what we've seen is that athletes have started to realize there is more than food. A lot of times food franchises are the harder franchises to manage."

TheStreet, on the following pages, highlights five sports celebrities who have adopted franchising as their next play.

1 of 6

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs