A recent study reveals that franchising is becoming more diverse, meaning exciting opportunities for the business as a whole
Most global franchise brands have experienced a change in customer demographics that is reflective of the changing population demographics in the United States. While some brands have effectively focused on improving diversity and inclusion among their franchisee ranks, many have yet to develop a strategic plan with this goal in mind. Earlier this year, a group of franchises gathered in Phoenix, AZ at the 58th Annual Convention of the International Franchise Association to share best practices in diversity and inclusion.
The program was organized by the IFA Foundation’s Diversity Institute and recently released the findings of a study prepared by Pricewaterhousecoopers entitled Franchise Business Ownership by Minority and Gender Groups: An Update for the IFA Foundation (March 9, 2018). The study, designed to examine diversity in franchising, compared 2007 U.S. Census data to 2012 Census data and confirmed that franchising is, in fact, becoming more diverse.
The percentage of minorities represented in franchising doubled from 2007 to 2012. This growth is expected to continue, reflecting the rapid changes in U.S. demographics generally. By 2050, the combined population of Hispanics, African Americans, Asians and Pacific Islanders is expected to make up a majority of the general population according to projections by the U.S. Census Bureau. This translates to great opportunities for franchising.
The International Franchise Association convention also featured details on creative and impactful initiatives implemented by three global franchise brands.
Franchise give away
7-Eleven expanded its already successful recruiting initiative for veterans to focus on women and diverse candidates. In 2017, 7-Eleven held a contest whereby it would give away one free franchise to a woman. Unsurprisingly, 7-Eleven received hundreds of applications, and ultimately awarded three franchises!
This was a win-win all around. The three winners received the opportunity of a lifetime with the bequest of a free franchise and the free publicity around the new business. The top prospects who did not win are now in the queue for further dialogue and mentoring by 7-Eleven.
While the company gave away three franchises, 7-Eleven was the real winner. It is now engaged with hundreds of diverse prospective franchisees it might have otherwise never met. It expanded its brand recognition and received numerous favorable media mentions. 7-Eleven also improved its overall goodwill within the communities represented in the campaign and elevated its standing as a true steward of those same communities. This is a wonderful page to borrow from 7-Eleven’s playbook.
National partnerships
To reach diverse prospective franchisees, Dunkin’ Brands seeks to join forces with national organizations already blessed with a diverse membership. A few years ago, Dunkin’ Brands announced a partnership with the National Association for the Advancement of Colored People (NAACP), and together launched the Diversity in Franchising Initiative.
Through the partnership, Dunkin’ Brands and the NAACP have been committed to increasing the number of African-American owned franchise businesses in the U.S. by offering franchising education, training, contacts and resources to help qualified candidates make their dream of business ownership a reality.
Some highlights of the program include Dunkin’ Brands participation at several NAACP state conventions, sharing information on the role franchising can play in creating community and economic development opportunities in communities of color, as well as hosting free bi-monthly Franchising 101 Webinars in collaboration with the IFA Foundation’s Diversity Institute and the NAACP.
These webinars provide valuable information about the many industries franchising represents, preliminary due diligence information and the legal aspects of franchising. Participants desiring more information about Dunkin’ Brands can then participate in a separate webinar. This provides Dunkin’ Brands with a large pool of prospective franchisees with which to further engage.
In Spring 2018, Dunkin’ Brands and NAACP followed the successful webinar series with an innovative Twitter Talk on franchising. The Twitter Talk was advertised to NAACP’s membership and was designed to reach a more tech-savvy individual who rely on social media for research. The program was led by executives from Dunkin’ Brands franchise development team, the NAACP, and the IFA Foundation Diversity Institute’s Chair.
For an entire hour, the Twitter audience was engaged in extensive dialogue and participated in polls to stimulate further questions. The discussion continued well after the scheduled program ended. Given this initial success, the group is likely to conduct future Twitter Talks on franchising.
Dedicated emerging markets team + financial incentives
Choice Hotels has made diversity a central focus in its growth plan, and has established a dedicated sales team charged with finding diverse potential owners. The initiative contains a financial component. Qualified applicants are eligible for up to $200,000 in financial incentives. The program offers 12 established brands from which the applicant may select.
The per-room incentives include $1,500 per room up to $200,000 for Cambria Hotels; $1,500 per room up to $125,000 for Ascend Collection, Comfort Brands, Quality Inn, Sleep Inn, Clarion, MainStay Suites or Suburban hotels; and $750 per room up to $50,000 for Econo Lodge and Rodeway Inn Properties.
Choice Hotel’s diversity program is open to African American, Hispanic, Native American and Veteran applicants. The program includes world class training to put the applicant in a position of success. This is just a sample of what global brands are doing to diversify their base of franchisees. The opportunities are endless. The Diversity Institute would like to hear about what your brand is doing to diversify. Contact the Chair, Earsa Jackson, at earsa.jackson@clarkhillstrasburger.com or 214-651-2354.
ABOUT THE AUTHOR
Earsa Jackson is a Member at Clark Hill Strasburger. She serves as the Chair for Clark Hill Strasburger’s Franchise & Distribution team and the Chair of the firm’s Diversity Committee. Earsa structures franchises and assists franchisors with on-going transactional needs and handles litigation matters in the following areas: business and commercial, False Claims Act, business torts, franchise and distribution, trademark infringement, misappropriation of trade secrets, contract disputes and probate. To learn more, visit http://clarkhillstrasburger.com.
