Fast Food Franchises Offer Employees Education Benefits

education benefits

As deadlines for scholarship applications approach across the world, fast-food franchises have started to offer scholarships for part-time and full-time employees. However, along with providing students with education benefits, franchises have also discovered that offering these scholarships increase their employee retention, mitigating the need to constantly search for new employees.

In addition to helping with the employee retention rate, recipients of these scholarships help to promote a positive image of the franchise since essentially helping a “needy” student upholds a positive public image of the brand. 

“It’s good community relations and it helps keep them entrenched in the community so they typically offer national scholarships and if you’re the recipient, in most instances, you can go anywhere,” said Director of Admission Ryan Cockerill. “But they realize that most of those students are going to stay local, so they’re keeping good relations and good connections with the community.”

According to the College Board, employers spend nearly $16.5 billion to assist in paying for their employees’ education, an almost $3 billion increase from $13.8 billion in 2009. The increase is in part due to an additional increase in benefits for low wage working employees.

Education benefits were first seen when Walmart began to offer aid with the payment of 15% of its employees’ cost to attend a for-profit university in 2012. Since then, Walmart expanded to a variety of programs including the $1 per day initiative, which allows employees to earn a college degree or certificate for this price. 

Starbucks then came into the scholarship game, partnering with Arizona State University to pay for the degrees of their baristas. Since then, franchises like McDonald’s, Taco Bell and Pizza Hut have developed programs to help pay in part or full for their employees’ education. 

In a data study of Cigna, a healthcare company, researchers found that the company’s employee benefits helped their costs. Cigna offers up to $5,250 a year for undergraduate courses and $8,000 a year for graduate courses. For each dollar invested in education, Cigna saved $1.29 in management costs. Employee retention had improved by 8% while participants in the program were found to be 10% more likely to be promoted. 

“The company might go, ‘It’s cheaper for us to offer a scholarship if we can designate this person as someone who’s going to stay with the organization for a while than it is to go out and have to go through the hiring process to bring someone in, and go through the training and indoctrinate them through the company,’” said Cockerill.

Part of the reason franchises and other companies are offering education benefits is because, with the rise of technological change in the workforce, an employee has a better chance of surviving in the workforce long-term with a higher level of education from a degree or certificate program. Additionally, with the skills-building programs employees can take advantage of, they are more likely to have a longer career at the company, but in a different position best catered to the future needs of the company. 

“In many instances, the scholarship they’re offering is not necessarily designed to give the recipient any specific skill training, because they’ll probably do most of whatever the skill training the company wants on-site,” said Cockerill. “It’s more of either establishing or strengthening a relationship with you as an employee so that you’re kind of incentivized to continue to work there.”

In order to fund these programs, money usually comes from either the franchiser or corporate. For McDonald’s, the franchiser pays for their corporate Archways to Opportunity program. Other franchises, like Taco Bell, pay for the education benefit depending on which location offers it. Scholarships and tuition reimbursement are either paid by the franchisees or corporate according to who owns the location the recipient of the benefits works at.

“For most of those, what I would call, corporate scholarships, the corporation itself is paying for them,” said Cockerill. “A lot of your larger corporations, [like] Coca-Cola Company, they set aside an annual budget solely for the purpose of sponsoring those kinds of scholarships.”  

If current trends continue, businesses will find new ways to retain employees in an ever-changing, competitive job market. With these benefits, students may be able to expect more scholarship opportunities to arise in the near future. 

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