When Ed Mirvish founded Toronto landmark discount store 'Honest Ed's' in 1948, one wonders if he ever imagined that someday it would be redeveloped and repurposed as prime real estate for Toronto's condo boom.
Whether Ed predicted this transformation or not, he did wisely hand the reins of his empire to the next generation, allowing them to make key decisions to protect the family legacy.
The founding generation of many family owned enterprises are headed for retirement in record numbers in the next five years. These companies represent an estimated 80-90% of all North American businesses,* and could be the first signs of an impending 'succession tsunami' that will create a radical transformation across the Canadian business landscape.
"The Honest Ed's sale makes a lot of business sense. Too many family companies implode because legacy pressures prevail and a tired/outdated business is kept alive (and subsidized) when it should be modernized for current and future realities," said Allen Taylor, President of CAFE Central Ontario. "I personally applaud the family's decision to redeploy one asset (real estate) and relocate the other asset (the business) in order to maximize their return."
Recent polling by The Canadian Association of Family Enterprise (CAFE) on this impending 'succession tsunami' has revealed that while 81.8% of businesses would choose to hand their family business over to a family member, only 48.5% have the expectation that a family member would, in fact, choose to take over the business.
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