The Market

by Simon Lord

last updated 11/08/2012

can you have TOO MUCH EDUCATION?

by Simon Lord

last updated 11/08/2012

A new survey suggests a high school education is all you need to be a top-performing franchisee

One of the areas covered in the recent Franchise Excellence Report is that of education. The survey, of 1852 franchisees in Australia and New Zealand, found that the best-performing franchisees are those who have only completed high school and have no tertiary qualifications. In fact, high school leavers achieved performance scores 10% higher than those with a post-graduate qualification. The findings were consistent for all performance measures: Financial Achievement, Customer Experience and Constructive Participation.

It’s worth noting that franchisees with a post-graduate degree scored significantly lower on two of the key attributes of successful franchisees: Brand Passion and Sales Orientation. The survey also found that the more education a franchisee has, the lower their level of overall satisfaction with the franchise.

The Franchise Relationships Institute, which carried out the massive survey, suggests that, ‘People with higher education are more likely to ask questions and challenge the status quo as this is what a higher education trains you for. This behaviour would appear not to be useful when running a small business, especially in a franchise system which will already have set operational procedures in place.’

Alarm Bells for Franchisors

At a time when more young people than ever are going into tertiary education – and incurring significant debt to do so through student loans – the findings are bound to ring some alarm bells among franchisors. The ‘average’ franchisee who responded to the survey was 47 years old and completed high school, meaning that the next generation of franchisees coming through is more likely to have tertiary education and, apparently, be more likely to question systems and express dissatisfaction.

One factor that may also affect satisfaction levels is the individual’s work history. Although this is not covered in the survey, it may be that those with tertiary qualifications have gone on to work at higher levels within larger companies. Their experiences there may also have tended to make them less satisfied (or less able to adapt to) the world of small business where less specialisation is possible.

As the Franchise Excellence Report concludes, ‘…franchisors need to consider how they will challenge the intellectual and creative talents of franchisees with a higher education.’

More Opportunities For The Young

However, for those without tertiary qualifications, the news is good. Franchising offers a structured way for them to get into business with good systems and support, and the opportunity to achieve high levels of success regardless of high-level education. As changing demographics  result in increasing demand from older people for services that will inevitably be supplied by younger people, so business opportunities will abound.

It’s worth noting that many of the world’s best-known entrepreneurs have no tertiary qualifications: Henry Ford, Ray Kroc, Larry Ellison, Richard Branson, Simon Cowell and Steve Wozniak, to name but six…

Read more about the Franchise Excellence Research Report.

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