Do You Need a College Degree to Succeed as a Franchisee?

A bachelor’s degree is always a good thing to have. A master’s? Even better. But, when it comes to owning a franchise, does it really matter whether you have a college degree or not? “Having a college degree is no guarantee of franchise success,” states Jimmy Hovey, who speaks from personal experience.

Five years ago, Hovey invested in a franchise with his parents, who have owned their own business for 30 years. Two years later, they had lost $500,000 and had to discount one of the three territories they had purchased. Hovey has an MBA, and yet that wasn’t enough to save him from investing in the wrong franchise.

“At the end of the day, a franchisor is in the business of selling franchises,” says Hovey. “While they may be very good at telling the story and getting you to sign, they may not be a good match [for you]. We looked at several franchises at the time, and [in hindsight] would have been better off with a ‘corporate’ model that fit better with a college-educated person.”

Will a college degree improve your chances of succeeding as a franchisee?

We posed the question to a few others in the franchise industry and got some interesting responses.

Franchising prizes the wisdom that comes with battle scars more highly than the wisdom that comes with a sheepskin

Mike Welch has worked for a franchisor, has owned a franchise, and is now the founder and president of FranNet, a franchise brokerage and consulting firm. He has had a successful career in franchising, yet he never got a college degree. However, he did learn some crucial things at what he calls “Real World University.”

“I'm quite certain that the lessons that I learned in my time in corporate America and as a small business owner have served me better than anything that I might have picked up in English Lit as a 19-year-old,” Welch says.

Not having a college degree has not hindered Welch’s personal success, but is it something that franchisors look for?

“Most franchisors are going to give little weight to a person’s degree during the selection process,” says Welch. “Good franchisors with proven track records are looking for transferable skills that the franchisee can leverage in order to be successful as an owner. Skills like marketing, management, team building, administration, etcetera, are most often built during a person’s working years, not their college years.

"Thus, franchisors tend to gravitate to corporate refugees because they already know how to implement systems and follow processes. In stark contrast to corporate America, franchising, in most cases, prizes the wisdom that comes with battle scars more highly than the wisdom that comes with a sheepskin.”

There are a variety of factors that are much more important than education in determining whether a franchisee will be successful

Benjamin C. Litalien is the founder of FranchiseWell, a franchise consulting firm. He also teaches the Franchise Management program at Georgetown University. According to Litalien, there are a variety of factors that are much more important than education in determining whether a franchisee will be successful, including choice of franchise, choice of location, choice of employees and managers, and choice of marketing.

“These ‘choices’ have little to do with education level, as most franchise prospects have limited, if any, experience with a unique investment like a franchise, dealing with site selection technology, negotiating a lease, , or being responsible for marketing at a local store level,” Litalien says.

Litalien argues that one of the most crucial mistakes people make is totally independent of one’s level of education. “As a franchise strategist and consultant, it amazes me how many people are willing to plunk down $250,000 for a business in an industry they know nothing about and rely only on input from a paid broker and the franchisor, both of whom have a vested interest in the outcome,” he says. “Spending a modest amount with an independent franchise expert could be the wisest investment they make, and that doesn’t require any education at all.”

More articles from AllBusiness.com:

• Do You Need a College Degree to Start a Business?
• Top 10 Hiring Mistakes
• 40 Reasons to Buy a Franchise
• 10 Signs of a Great Franchise Opportunity

A good franchise brand will provide the education necessary to run the franchise successfully

Tom Scarda, a franchise consultant with FranChoice, believes that a college degree neither helps nor hinders an individual’s chances for franchise success. According to Scarda, a good franchise brand will provide the education necessary to run the franchise successfully.

“I believe that being able to mold a person from a CPA to a dog trainer, or from a police officer into a multiunit owner is the power of franchising,” says Scarda.

“Similar to attending college, starting a new franchise is all about submersion. If a person decided to become a doctor, they would have to do all the things it takes to be a doctor: Go to med school, [do an] internship, do a residency, and begin a practice.

"In franchising, once you pick your business, you go to training and submerge yourself in that product or service, just like an abridged college program. Both the student and the franchisee start out as a blank slate and become a professional after studying the nuances of the industry," he says.

Franchisees need more than a college degree to succeed

The consensus? Education is important, but it’s not always the determining factor in a franchisee’s success. Most important is getting off to the right start.

In addition, the education provided by the franchisor can be more important that any university when it comes to applying that knowledge to a franchise.

RELATED: Want to Start a Business? Maybe You Should Buy a Franchise

About the Author:

Sara Wilson is a freelance writer who specializes in issues related to small businesses. Contact her at wilson.sara@gmail.com.