Watching fellow college students working for $7.50 an hour after graduation, Tana Walther, a fashion-design major at Kent State University in Ohio, snapped up an alternative offered by her father—to run a Pita Pit restaurant franchise he would buy. “I guess I bought her a job,” says her father, Jan Walther, of North Canton, Ohio.

According to The Wall Street Journal, parents often say they would do anything for their child. Setting a child up in business is surely one big test of that bond. A lot is at stake: Small-business failures are common, and parents risk losing their entire investment, their life savings, or more. They also risk straining their relationships with young-adult children intent at this stage on independence.

Still, many parents see business ownership as a better bet for their kids’ future than a graduate degree. And in this era of renewed interest in entrepreneurship, some parents I interviewed described it as a way of recapturing for their children a stake in “the American dream”—the opportunity to control their destiny and have a chance at gaining wealth.

Many parents choose franchises for their kids because they seem to offer marketing, branding and management support. While no data on failure rates is available, a study by the Small Business Administration’s Inspector General in 2002, the latest available, said there was no evidence that franchises succeed any more often than independent businesses.

Start-up costs, including leases for space and equipment, range from roughly $5,000 to $10,000 for such low-cost operations as cleaning franchises, to $1 million or more for popular fast-food restaurants. Information on risks and legal pitfalls for franchisees can be found at BlueMauMau.org, an online trade journal.

Photo by carlsbadistan.com.

Originally posted by Rich Whittle on July 28, 2014 in Ideas.

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