The American economy is so awful, the Wall Street Journal reports that parents of means are now resorting to buying franchise businesses to keep their adult children employed, shelling out six figure sums to purchase their little darlings Pita Pit restaurants and College Hunks Hauling Junk moving trucks:
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 he would buy.
“I guess I bought her a job,” says her father, Jan Walther, of North Canton Ohio. Prospects of a career in fashion seemed remote, and Tana, a college athlete, loved eating at Pita Pit restaurants while traveling with her track team. Her first new restaurant opened last year near campus in Kent, and the 25-year-old hopes to open several more.
Before we all let out a collective “yuck” let’s take a look at what’s driving the trend.
First up, of course is the economy. According to the Pew Research Center, unemployment among those aged 18-29 is higher than it has been in decades, with job offers for new college graduates half of what they were in 2007. Applications to law and business schools are soaring as students, desperate to find a safe harbor during the Great Recession, decide to use the time to burnish their credentials for when the economy improves. Even non-paying internships have become so competitive that enterprising charities are making a mint auctioning off gilded gigs at Vogue and other prestige firms.
However, evidence is mounting that more and more parents are beginning to rebel at paying the ever-soaring tab for higher ed, with a study recently released by Countrywide Financial finding the number of moms and dads who say college is a good investment in their child’s future earning potential has dropped dramatically since 2008. As the Wall Street Journal notes:
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.
Moreover, a recent survey by Merrill Lynch of affluent Americans (defined as those with investment assets of at least $250,000) found that one-third were currently supporting at least one adult aged child, with 28% doing so to help maintain the child’s standard of living and another 21% saying their son or daughter was unemployed, and need the aid. If you are already giving your adult children funds from the First National Bank of Mom and Dad, it isn’t a huge logical leap to then decide it is better to give the money in the form of a business rather than in the form of a no-strings attached hand-out.
Then there is the impact of books like The Millionaire Next Door, which posit that the quickest path to riches is not a load of high falutin’ degrees, but a business of one’s own. Of course, the book’s authors, Thomas Stanley and Wiiliam Danko, also argued that giving money to adult children is a fast way to to the poorhouse for both parent and child but but that’s not a message many current moms and dads – used to calling up schools to complain about their children’s grades and otherwise engaging in checkbook parenting — are likely to heed.
Photo: Pita Pit