Should you invest in a franchise or college degree?

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As families consider the college application process, this post may challenge parents and graduating high school students to think differently when considering a career in the business world.

Note - as you read this it may feel like I'm speaking directly to you the student, or directly to you the parent, or both at times. It's meant to help both of you walk through this process together.

One may ask, "Is a formal education the only path?"

In this article, I'll cover:

Cost of college education vs. a franchise business in the United States
Potential revenue earned in college vs. four years of franchise ownership
What's learned and earned in college vs. in real-world-business
College debt vs. investment debt
5 potential options

This post will help save you a lot of wasted time and money. It will also provide career clarity, which eases the stress.

For the purpose of this post, we'll assume you're exploring a typical four-year college timeline.

I wrote this as I reflect on my career path vs. a friend who went into the restaurant business straight out of high school waiting tables. He discovered his passion to be a chef. He knew he wanted to own a restaurant one day.

At the same time, my parents were encouraging me to be a Dr. or a lawyer or "whatever I wanted to be," with an emphasis on Dr./lawyer. Clearly, I didn't go the Dr./lawyer route…more on that in a moment.

Since most of today's college degrees are business degrees (19.4% per educationdata.org), we'll focus on students interested in a business degree.

Let's compare what's

earned vs learned.

(young franchise owners vs. business college graduates)

Let's first look at the costs of a franchise vs. a college degree.

Franchise Investment

Many think of McDonald's or other food franchises as the business model, which may cost millions of dollars to invest in.

That's not the case. In fact, there are many non-food franchise opportunities today. The average franchise total investment and revenue may surprise you.

Per ADP, most franchise startup costs average between $100,000 and $300,000 – the price can vary between industry, location, and type of franchise.

The average college education investment per educationdata.org:

A four-year state university undergraduate degree will run approximately $102,000
A four-year private university undergraduate degree will run approximately $218,000

Another factor to consider is the revenue side – over four years.

Regarding the franchise owner's income.

The average franchise owner's income can vary greatly.

Let's hypothetically say it's $25,000, $50,000, $75,000, $100,000, or $150,000+ a year.

That's hypothetically $100,000, $200,000, $300,000, $400,000, or $600,000+ potentially over four years.

We're not talking revenue and net profit of the franchise, as they can vary even more per franchise and industry. You will want to review Item 19 of the Financial Disclosure Document when considering a franchise. The FDD is regulated by the Federal Trade Commission to provide transparency to see actual financial performance.

Regarding a college student's income.

Let's be optimistic and hypothetically say a full-time college student works part-time for $20 per hour for ten months:

10 hours a week or 40 hours a month - $800 a month x 10 months - $8,000
20 hours a week or 80 hours a month - $1,600 a month x 10 months - $16,000

Over four years, let's say a college student earns between $32,000 to $64,000.

These numbers help draw a contrast in terms of potential expenses and revenue.

Who learnes more? The young franchise owner out of high school or the college student?

What does the franchise owner out of high school learn in four years:

How to manage a team of employees
How to meet payroll
How to provide customer service
How to overcome daily entrepreneurial challenges all face
How to operate a business
How to budget
How to manage a P&L statement – cash flow
How to pay business taxes
How to network in a business setting
How to market their business
How to sell a product or service
How to work with city/state/federal regulations
How to fail and get back up
How to run their own business

What does a business college student learn in four years?

How to manage a team of employees -in theory
How to meet payroll – in theory
How to provide customer service – (in theory or through part-time work)
How to overcome daily entrepreneurial challenges all face – in theory
How to operate a business – in theory
How to budget – in theory
How to manage a P&L statement – cash flow – in theory
How to pay business taxes – in theory
How to network in a business setting (in theory) and a school social setting (college life, business fraternity or fraternity/sorority)
How to market their business – in theory
How to sell a product or service - in theory
How to work with city/state/federal regulations – in theory
How to fail and get back up
How to lay the groundwork for the next steps - the bachelor's degree opens doors: job opportunities, business opportunities, more education.

Certainly, college life is different than that of young entrepreneur. It's a personal preference regarding what's important.

Both come with unique benefits.

Regarding the university route, memories of a lifetime are made while learning. Gamedays are a huge deal. Some meet their spouses. Lifelong friendships begin. '

On average, individuals with a college degree earn higher salaries compared to those with only a high school diploma or less.

And many other excellent reasons.

Going the entrepreneurial route, the franchisee gains real-world experience, practical knowledge, and life, business, and leadership skills that can't be taught from a book.

The franchisee has a four-year earnings head-start running a business.

Equity may be built into the business to keep growing the business. (The young franchisee faces the realities of business sooner - there's also the risk of failure running a franchise – it can and does happen - it's business.)

Another factor to consider are the resources one has for college vs. a small business:

Scholarships play a role in offsetting college costs.
Family financial support plays a role in college or a franchise.
Financial aid for college education or franchise funding play significant roles.

Per the Chamber of Commerce, the average student debt in the U.S. is $37,172.

55% of students from public four-year institutions had student loans.
57% of students from private nonprofit four-year institutions also had student debt.

As of 2023, the average student federal loan interest rate is 4.99% for an undergraduate degree. That accrues over the life of the loan, even when the student is not making payments on the loan.

Regarding franchises, funding options may include personal finances, 401k rollovers, Small Business Administration loans, etc.

With a franchise, there's the opportunity to generate a healthy and tangible ROI. Click here for funding options.

The question is, which approach makes the most sense per the individual's specific circumstances and personal interests?

Why I see the 5 options below for high school graduates.

On a personal level, let me briefly share my journey, which is why my mind is wide open to options. For context, I have two degrees.

I started LSU as a pre-med student in my first year. I quickly realized I was on the wrong path as I was flunking my zoology and chemistry classes. I ended up earning a Psychology degree, which did little to prepare me for the real world.

While I was studying at LSU, my friend, Tim Creehan, whom I mentioned earlier, became an executive chef by the age of 19, working under his mentor, Chef Phillipe Parola.

Ooooohhh, the irony - By the time I graduated in four years, Chef Creehan had opened his first restaurant in what would become a string of marque restaurants in Destin, Florida. Meanwhile, my first job after college was waiting tables at Applebee's with my newly minted Psychology degree. That was a rude awakening.

Recognizing how poorly prepared I was for the real world after earning my degree, I fast tracked the GMAT so I could get my Master's in Business (MBA). I was also determined to gain "experience."

While earning my MBA, I was fortunate to land an internship with the university's Small Business Development Center consulting with entrepreneurs.

Let me emphasize this. I'm proud of my undergraduate and graduate degrees. I'm very grateful my parents valued the importance of higher education.

Sure, I had too much fun at times. Ultimately, the curvy journey paved the path to where I am today, which I'm also very grateful for.

Because of my experiences and because college costs today keep rising, I no longer see college planning services as the first source of information.

In fact, I see five options today for any high school graduate interested in business; to be successful in any one of them takes hard work and commitment.

Option 1 - The military - go active duty or go for a military scholarship to college. Either way, your education is paid for, and you're paid to learn.

This is undoubtedly an excellent and noble calling to serve our nation. Along the way, the education and skills training options are endless and priceless. New military veterans are highly recruited by businesses as their skill sets carry over well into business.

Also Note – veterans own 1 in 7 franchises. Many franchisors offer discounts to entice military veterans for good reason. See why here.

Option 2 - For the high school graduate who hasn't "figured out" what they want to be, that's ok. It's a common problem. That was me. That's still the majority today. College or trade school is a wonderful time and a great way to begin figuring things out.

To separate oneself from the pack, I'll plant one seed. Consider going all in, no matter the age or career stage, on self-education to learn what high school and universities fail to teach us regarding mindset and sales skills. YouTube and the online courses available today make that possible and easy.

Option 3 - Go to work in your field of interest to test the waters. Volunteer if needed to get your foot in the door. If you like it, find a mentor as soon as possible, as Chef Tim Creehan did. And go all in and get paid to learn.

Self-education is the byproduct of going all in in the real world.

Option 4 - The franchise system route may be a great opportunity for the high school graduate with a strong entrepreneurial spirit.

Possessing a high level of maturity, discipline, and responsibility are vital to success. If the student possess those characteristics, investing the money in a franchise instead of a college degree may make more sense. (given the financial resources available)

Per the International Franchise Association, there are over 300 different types of franchise businesses across different industries operating in the U.S., providing many options.

Franchises offer robust training, ongoing education, and a community that brings the books to life in real-time through hands on experience. Franchises also work due to their tested systems and processes.

Option 5 - A hybrid model may work best combining the previous options. That depends on the individual's circumstances, resources, interests and the entrepreneurial sprit needed to make that happen.

At the end of the day, education comes in all forms.

One of the smartest people I've ever known was a close mentor of mine who passed away far too soon. He earned his college degree in a different way. Mike Voisin was his name.

He was an entrepreneur his entire life. If he were alive, he would tell you he went to "Harvard on the Bayou" – in other words, the school of hard knocks in southern Louisiana working in the seafood business.

Mike's love of serving others and lifting others up made him an incredible entrepreneur, person and family man.

Mike's impact on the Louisiana seafood industry was recognized around the global seafood community, not to mention the effect he had on thousands of lives outside of seafood. At 59 years old, he was awarded a Honorary Ph.D. from Nicholls State University. (known for its seafood program and culinary program)

Education matters!

At the end of the day, I value all forms of education, especially continued self-education and training.

To button this up, I sincerely believe it's worth exploring all the options that make sense to you.

Sometimes it's a direct path when one senses their calling early in life. Sometimes, it's a really curvy path as one figures it all out.

All five options come with risks, opportunities, and tradeoffs (opportunity costs).

Also, note this isn't about your destination; it's all about your journey that's right for you and you alone. I was encouraged to be a doctor. I chose a different path. I found my passion serving entrepreneurs.

Hopefully, this helps you; let me know if it does…I'd love to hear about your journey.

Make it a great day!

P.S. No matter what direction you go in, take the time and absolutely do your due diligence to avoid a lot of wasted time, money and heartache. The due diligence will also help tee up your success when you find the right path for you. Whatever path that is, make sure it feeds your soul. (see here)

Finally, enjoy this stage of life to its fullest for you have options. It's also very important because it lays the foundation for your future.

If you've read this far, there's no doubt you're serious about your future; I'd say you have a very bright future!

What is the franchise & freedom framework?

Just as reputable franchises use systems and processes to help assure mutual success, the franchise & freedom framework is used to effectively and efficiently match franchise candidates with franchisors.

This system helps eliminate the guesswork for both franchise candidates and franchisors, leading to better franchise matches for both parties.