Overcoming Barriers to Franchise Ownership for Women and People of Color
What you missed at the session on the Economic Power of Franchising for Diverse Entrepreneurs & Communities at the 2023 IFA Convention
At this year’s International Franchise Association Convention, I had the pleasure of moderating a session on the Economic Power of Franchising for Diverse Entrepreneurs & Communities. Panelists John Lancaster, VP of Emerging Markets Franchise Development, Choice Hotels, Javier Solis, Co-Founder, Toro Taxes, and Tim Williams, Director of Operations & Franchise Development, Williams Fried Chicken, shared how people from underrepresented backgrounds can enter the franchising community and successfully grow a franchise business, and more importantly, how franchise brands can help overcome barriers to franchise ownership women and people of color and women.
If you weren’t able to attend, I thought I’d share the takeaways from the session for franchisors interested in promoting diversity, equity, and inclusion (DEI) within their franchise system:
1. There are LOTS of opportunities to bring more people from marginalized communities into franchise ownership. According to our data here at Franchise Business Review, roughly 26% of franchises are owned by people of color, versus 17% of independent business owners. In addition, one third (32%) of all franchises today are owned by women.
2. Know and knock down barriers. Lack of awareness of franchising, access to capital, and education can all limit people from becoming franchise owners. Our friends at Stay in Your Lane helped us put together a list of traditional barriers and ideas to tackle them.
3. Get out in the community you want to engage with. I went to Toni Harris Taylor, a Network In Action franchisee, because she is SOOOO good about networking with your target audience. Here are her recommendations:
- Encourage franchisees to source funding from their personal networks.
- Find organizations that cater to minority communities, like graduate chapters of fraternities and sorority organizations, and centers of influence in the entrepreneurial community that can connect you with the target market. Sponsor events in those communities to make authentic connections.
- Franchisors could create scholarships for bachelor and masters level college students to attend and/or create mentorship/shadow programs for candidates with successful franchisees.
4. Learn what other franchisors are doing. Here’s how some leading brands are making strides in creating more diversity in their systems:
- YUM! Brands. They lead the way on focusing on DEI in their system. They funded the YUM! Center for Global Franchise Excellence at the University of Louisville with undergraduate, graduate, and certificate options. Their Franchise Accelerator, in collaboration with Howard University, has committed $100 million over the next five years to address inequality by focusing on equity and inclusion, education, and entrepreneurship.
- CKE Restaurants. CKE is the parent company of Carl’s Jr and Hardees. We were lucky enough to have Michelle Sermon, their Global VP of Learning & Organizational Development, DEI & Corporate Communications, speak at our FBR Summit last fall. She shared the DEI initiatives they have in place with their corporate team and in their corporate owned locations:
- Educational sessions on uncovering unconscious and conscious bias, and how to educate, communicate, activate.
- Creating affinity groups for women, people of color, and their LBGTQ+ community members.
- Top down leadership from the CHRO & CEO. Both are highly involved in the Human Rights Campaign (HRC) and Corporate Equity Index and pledged to be part of the Action & Inclusion on DEI (part of 2000 companies).
- They share best practices around what is working at corporate locations and they collect DEI best practices from their franchisees to share with the whole network.
- Retro Fitness. In 2022 they launched Project LIFT, an initiative to open 500 new gyms in 50 Black and brown communities over the next five years. Franchise fees for these clubs will be waived and royalty fees will be reduced by 50% for one year, and a portion of their royalties will go to community organizations.
- Anywhere Real Estate. They have designed an Inclusive Ownership Program to attract real estate brokerage owners from underrepresented groups (including women, people of color, and people who identify as LGBTQ+) to affiliate with one of Anywhere’s franchise brands by offering incentives such as a waived initial franchise fee, additional financial incentives, exclusive education and mentorship opportunities, and complimentary membership and conference registration to an industry partner organization of choice.
- Ben & Jerry’s, always at the front in leading important work around diversity, offers BIPOC (Black, Indigenous, People of Color) franchisees rebates on first-year royalty fees and reimburses up to $2,500 of training and development expenditures. Ben & Jerry’s also waives the $7,000 transfer fee for existing scoop shop franchisees who sell their shop to an approved BIPOC candidate and rewards the seller with a $10,000 payment.
- Wetzel’s Pretzels created an “Access to Equity” program, which includes business resources and education support, as well as up to 50% off the franchise fee, 50% lower royalty fees for one year for additional bakeries, and other discounts.
5. Get involved with resources and programs focused on the same initiatives:
- Multicultural Foodservice & Hospitality Alliance: PepsiCo made a $2.5 million commitment to create the Pathways to Black Franchise Ownership program, focused on creating 100 Black-owned franchise restaurants by the end of 2023.
- Key4Women: Offers financial advice and solutions, education on leadership skills, and mentoring and networking for women to help them become business owners.
- She Has a Deal: An education, pitch competition, and investment fund for women to achieve hotel ownership.
Upcoming DEI Education Opportunity
FBR is hosting a webinar on March 21 with Marcus Sawyerr of EQ Community and Charlie Chase, outgoing IFA Chair & CEO of FirstService Brands, Unlock Your Franchises Potential and Cultivate an Inclusive Environment to discuss how franchise organizations can incorporate diversity, equity and inclusion (DEI) initiatives to strengthen engagement, trust and loyalty—from employees, franchisees, and customers.
Whether you’re wondering where to begin or looking for ideas to bolster existing DEI initiatives, join us to learn how to:
- Identify barriers to diversity, equity and inclusion
- Build Community to boost hiring and retention
- Measure DEI impact, including access to the latest study by EQ Community