Why Diversity in Franchising Matters

America is being transformed before our very eyes.

The U.S. Census Bureau estimates that by 2045, the United States will have a population of some 289 million people. And for the first time in the nation’s history, the majority of people living in this country will be non-white.

As these demographics continue to change year after year, decade after decade, unique opportunities are arising, compelling franchise organizations to view diversity and inclusion not just as the right thing to do, but as a way of life.

As a result, independent organizations have formed to unite the nation’s franchises in a push toward diversity. Founded in 2006, DiversityFran, an education and recruitment program through the International Franchise Association, was designed to assist IFA members in reaching emerging markets and increasing diversity while at the same time educating diverse prospective franchisees about opportunities in franchising.

Already, minorities account for 20 percent of franchise owners, as opposed to 13 percent of non-franchised business opportunities—a sign that the IFA’s focus on making franchising more accessible to everyone is paying off.

But according to Miriam Brewer, the senior director of education and diversity for the IFA, there is still more work to be done. We spoke with Brewer to hear her thoughts on the current landscape of diversity in franchising.

1851: What are the main obstacles that prospective and current minority franchisees are facing?

Brewer: The biggest obstacles can be summed up in three parts. We call them the “gaps.” One is the information gap: The minority community is not as well informed about franchising and its opportunities. The second one is a relationship gap: Minorities are less informed and less involved in franchising, and they have few franchise relationships. This makes that initial connection very difficult. And the third is a capital gap: A lot of minorities are already at an economic disadvantage to begin with. I always say that when America gets a cold, minorities get pneumonia. We’re seeing that a lot of times, African American or Hispanic business owners are asset-poor, and for that reason, many people don’t even consider starting their own business in the first place.

1851: Are these challenges surmountable?

Brewer: Absolutely It’s all about combating myths. We do this by continuing to work to make sure there’s a greater awareness of the various programs out there to assist minorities and others. We work with leading organizations like the National Urban League, Minority Business Development Agency, U.S. Hispanic Chamber of Commerce, National Bar Association, the NAACP, Association of Small Business Development Centers, U.S. Conference of Mayors and various ethnic Chambers of Commerce across the country. In doing so, we’re broadening our reach in lower income, disadvantaged communities, and giving them the information they need to make an educated decision on franchising.

A lot of times, it’s simply a matter of people not knowing what their options are. So in our various outreach programs, we teach them how to ask questions, how to do their research, how to find the right business model, how to secure finances and how to utilize incentives. The truth is, the resources are out there—it’s just about helping minorities discover those resources. In doing so, I believe we can close all three of those gaps.

1851: In what ways are franchises boosting diversity on their end?

Brewer: Many franchises will offer incentives, and there are usually three main categories that franchisors tend to work with when they’re looking to increase access to their systems for minorities. The most popular method used, by far, is to offer discounts on initial franchise fees. The second most popular incentive is financing assistance and other discounts to help offset the sizeable franchising fees that new franchisees typically incur. And the third, which is a little more rare, is franchisors offering an increased amount of administrative and development support above and beyond what they typically offer.

1851: It’s clear that great strides have been made when it comes to bolstering diversity in franchising. But how can things improve?

Brewer: I believe change still needs to come from the franchise companies themselves—they need to be as diverse as the people they want to attract. Make sure your corporate offices are diverse. If you tell me that you’re committed to diversity, and I don’t see it in your corporate hiring policy, why should I believe you? Practice what you preach.

Gone are the days of saying diversity is the right thing to do on a moral standpoint. You’ll realize that it’s not just a brochure that you give out with nice little images. Diversity is the right thing to do because it increases your bottom line. When you diversify in thought and practice, your company as a whole will do much better in the end. There's no denying that we're a global society and economy. Our work practices have to reflect that. If you’re serious about diversity, then it’ll permeate through your entire organization.