There's an interesting dichotomy at work when it comes to
minorities in franchising. In general, if you talk to minority
franchisees, they're enthusiastic about the process. When you
talk to franchisors and franchise organizations, they express an
awareness of how valuable minority franchisees are to the bottom
line. And according to the Milken Institute, minorities will become
an even more significant percentage of the American landscape with
their numbers expected to reach about 50 percent of the population
by 2050.
Yet despite all the good vibrations, minority franchise numbers
are still extremely low, and the franchise community says most
sectors need to conduct outreach efforts to pull in more of this
market.
So what's the problem? Lack of information, says Wendy Grant, newly
appointed manager of the strategic diversity initiative at Choice
Hotels-parent company of hotel brands Comfort, Quality and Sleep
Inns; Main Stay Suites; Clarion; Econo Lodge; and Rodeway.
"I've asked people who own McDonald's and other
franchises whether they've ever thought about buying a hotel
franchise. And they say no one has ever approached them,"
Grant explains.
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Net worth requirements may be another perceived barrier, says
Russell Smith,
director of global franchise development for Athlete's Foot and
chair of the minorities in franchising committee for the International Franchise
Association (IFA). The price of certain franchises, or at least
the perception that prices are high, can be a problem.
GNC franchisee Joyce Smith Patterson points out another factor:
"[More and more] minorities are [finally] in jobs that pay
very well, and they're afraid to make that step. They think,
'Suppose I do and I'm not successful, and I've left a
$100,000 job trying to double my income.' It's just
fear."
Patterson, 47, became GNC's first minority franchisee 11
years ago, wiping out her personal savings to come up with the
initial investment of about $45,000. Her first location in a
Greenwood, Indiana, mall was financed by the franchisor. She
purchased her second store in 1994 with a bank loan and bought the
third store a little more than one year ago with money from the
proceeds of her first two GNC locations.
Minorities haven't always been able to achieve this level of
success in franchising, according to Jesse Chalua, 42, owner of two
Chick-fil-A franchises in Houston. "[Franchises] are making it
easier to get on board," says Chalua, who initially bought an
urban Chick-fil-A with a $5,000 investment in 1987 and then traded
up to a larger store in a different area after proving himself.
"Now, when you sit down and talk with [franchisors], you
realize they'll work with you. But that hasn't always been
the attitude. That's only happened in the last five or six
years."
These days, a number of franchise systems, such as Choice Hotels
and FASTSIGNS
International, are spending more time recruiting minorities.
"Our focus on minorities has begun this year, [primarily
because] they represent a lot of potential [as franchisees],"
says Larry Lane, FASTSIGNS' vice president of franchise
development. FASTSIGNS has 20 minority-owned franchise units in the
United States out of a worldwide total of 438 stores. "A
number of minorities have resources, but they just haven't seen
the franchise opportunities that fit with their background,"
says Lane.
FASTSIGNS didn't have to go looking for Wendell Haynes, 57,
who started a FASTSIGNS franchise in New York City in April 1998.
"I was the one reaching out for information, direction and
assistance," says Haynes. "I didn't get the feeling
that franchise organizations were actively recruiting or not
actively recruiting minorities."
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