Family businesses face bankruptcy risk

More than 70,000 businesses in France could go bankrupt by the end of 2026, but family businesses are an exception. They can rely on their intangible heritage, such as their history, culture, or reputation, in addition to financial assets.

Family businesses dominate the economy

In an economic landscape where the average lifespan of businesses continues to decrease, family businesses defy time and span generations. A 2024 study based on French administrative data shows that 71% of family groups among the 95,055 groups of more than ten employees studied are family businesses. They represent 69% of employment and 65% of the added value of the sample.

Intangible heritage defines longevity

In a 2025 National Observatory on Family Entrepreneurship report conducted among 305 family business leaders, 18% of these companies have a longevity of more than fifty years. The first characteristic of family businesses older than fifty years lies in their relationship to intangible heritage, defined as "the set of non-material elements that contribute to the value and identity of a business." This includes its history, knowledge, skills, brands, client relationships, and company culture.

Intangible heritage and legacy

This concept relates to a concept in Anglophone social sciences called legacy, defined as "an immaterial and persistent trace of the past that shape the strategic behaviors of the present." The history and culture of family businesses are artifacts transmitted and interpreted from one generation to another. In the report, 83% of leaders of family businesses older than fifty years associate intangible heritage with history and traditions, compared to 71% in the entire sample.

Leadership transitions and family values

The older a family business is, the more it intends to remain family-owned. In the report, 72% of leaders of family businesses older than fifty years plan to entrust the ownership of the business to one or more family members in decision-making positions, compared to 57% on average. These results highlight a process of family anchoring, which strengthens over time and intensifies the phenomenon of "path dependence."

Path dependence in family businesses

This term, created by economist Paul David in 1985, refers to a process in which past choices and trajectories strongly condition present and future decisions, making any change or reversal difficult. In the case of family businesses, this concept shows how they are influenced by their history and past decisions. Businesses evolve on "natural trajectories," their future choices being shaped by previous experiences and routines.

Intangible heritage and growth

The older a family business is, the higher its average turnover is. Among businesses older than fifty years in the report, 50% achieve a turnover exceeding 5 million euros, compared to 24% for those younger than fifteen years. Persistence can be synonymous with growth. Businesses that span generations manage to grow and develop by capitalizing on their intangible heritage – reputation, networks, skills – to conquer new markets.

Financial capital as part of intangible heritage

Additionally, 55% of respondents consider "financial capital" as part of the intangible heritage. A vision that may seem paradoxical; financial capital, by definition, is a material and quantifiable resource. The reason? According to 95% of leaders, it improves the company's reputation. However, leaders identify certain risks associated with intangible heritage: 35% say it limits the ability to attract new talent and 36% consider it complicates the transformation of the company.

Balancing preservation and adaptation

Our report highlights that 97% of leaders want to preserve their intangible heritage, but 67% believe it must be adapted, at least in part. Longevity is an asset only if it is accompanied by a permanent ability to question oneself.

New generations and changing values

"We see that the new generations no longer want to do as the previous generations did, that is, to wholeheartedly adhere to the family business. They also think about an exit. (…) The work value has evolved. The sense of belonging is diluting and decreasing more and more within the new generations of employees," says an expert interviewed.

Longevity as an asset or a trap

If the longevity of family businesses forces admiration, it raises a thorny question: does this longevity really constitute an asset, or can it become a trap? How many century-old businesses have disappeared for having respected too much the founder's vision in the face of technological or societal ruptures?