A growth strategy that fosters and encourages inclusion of minorities in franchising is clearly a two-way street. People from a variety of cultures and ethnic groups can now turn to franchising for opportunities for business ownership and employment. In return, franchise companies can attract more consumers, franchisees and employees as they learn and earn from emerging markets.
But there's still a long way to travel. The latest U.S. Census figures reveal that of the 275 million Americans, 71 percent are Caucasian, 13 percent are African American, 12 percent are Hispanic, 4 percent are Asian and 1 percent is Native American. Presently there isn't an accurate survey that assesses minority representation in the ranks of franchising, but the percentages are believed to be somewhat lower. What's more, most franchise companies have only recently begun to extend their reach beyond traditional boundaries to these large and growing market segments.
Untapped resources, Endless possibilities
Hispanic. African American. Asian. Native American. Under these all-encompassing group headings are an infinite variety of people from various cultures. IFA President Don DeBolt believes the same can be said about the franchise community. "When most people think of franchising, they still think of only one thing-fast food." DeBolt believes the biggest challenge the franchise community faces is to communicate to people within new marketplaces the breadth and scope of choices franchising offers. "There are enormous opportunities in the area of services, for example. And there are also retail concepts that are affordable that are eager to have a presence in new territories," he adds.
DeBolt emphasizes that there are a countless number of concepts that can be operated from the home and he believes that discovering the right franchise is key and that choosing wisely means finding a concept not just because it promises financial rewards, but also because it matches a person's interests and qualifications.
DeBolt points out that in emerging markets, as elsewhere, it's often easier to finance a franchise than it is an independent start up because of the track record and business projections that franchise companies provide.
He warns that lack of funding is too often blamed as the single most important barrier to entry. But he says there are other hurdles to overcome if franchising is to become truly inclusive. Management skills must be developed and a greater understanding of franchising must be achieved through education. "It isn't simply a matter of writing a check," he says.
In the short term, the IFA is continuing to communicate the availability of funding through the SBA. It is also creating awareness of the growing number of "boutique" sources providing funds to minorities looking to become franchisees.
Nowhere is the franchise community's interest in minority issues more apparent than in its recent reaction to the request for contributions to the capital campaign for the IFA's Educational Foundation-the education and research arm of IFA.
In 1999, Sidney Feltenstein, chairman and CEO of Yorkshire Global Restaurants, headed up the drive to build The Franchising Community Fund to ensure that franchising attracts the besttrained workforce, the best and brightest franchisees and the best corporate managers and support systems. The goal of the campaign was to raise $2.5 million to bring the fund level to $5 million. In the process, the IFA discovered that its member companies and suppliers had specific areas of interest.
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