Minorities Take Franchising New Places
Printed in USA Today
by Nancy Rathbun Scott
Good people inspire progressive franchise companies. The result is excellent business for everyone. Maybe that's why, lately, smart minority entrepreneurs show deepening influence.
Terrian Barnes, vice president of public affairs at the International Franchise Association says, that, while minorities' inclusion in franchising is not new, some of the urban programs and large, multi-unit deals for minorities are. Lately, Barnes says she can't keep up with minority groups who ask her to come and talk. "They want to hear about franchising, about how to evaluate and access franchise opportunities. They want to believe that, somehow, if I say franchising is an opportunity, it has to be. They want to hear from another minority that, 'Yes, It's real.'"
Robert Muir, senior vice president of franchise development at Sylvan Learning Centers, confirms growing opportunities for minority entrepreneurs, particularly in urban areas. "Sylvan already has centers in about 30 school systems around the country-in Baltimore, for example, we have Sylvan Centers in about a third of the elementary schools. These centers are corporate, because we didn't have franchisees in the inner city. If we'd had franchisees in the inner city, they would have been the delivery point."
Muir hopes more minorities will come to Sylvan. "In the early years, Sylvan was seen as a franchise for the suburbs, but about four years ago we started making inroads to the urban areas. There is a great business opportunity for Sylvan in urban areas around the country and, hopefully, we can connect with potential minority entrepreneurs who will want to take advantage of the inroads we have already made."
Is the opportunity for minorities and women real?
"I don't want anyone to believe that everything is perfect," Barnes says. "I think anybody-and I don't care who they are-should check the offer out for themselves. Every franchisor is-and should be-committed to their own success. But I am saying, 'Minorities and women have succeeded. And these are folks in different situations, from different backgrounds, in different economic circumstances. These folks have done it-and done it so successfully that some of them are out there-on their own dime-spreading the message that, yes, with franchising there's an opportunity to really create some wealth for yourself; not just have a job, but really take some control of your life."
Minorities have helped franchisors conquer new markets
Russ Smith, director of franchise sales at The Athlete's Foot, says his company long viewed the inner city as an excellent market. "First and foremost, many of our best customers live there. Before we came into the inner city, we knew those customers were buying shoes from us in the suburbs, but also from our competitors. We reasoned that, if we could come into the community where our customers live, we would not be dividing that market."
Finding qualified minority franchise owners who could partner in penetrating new markets wasn't so easy, however. "Corporately we've pushed that inner city wagon. We were running ads in major metropolitan markets, looking to place in these markets, but had received only a fair to mediocre response from qualified buyers. It's expensive. The buyer needs $300,000 net worth and $100,000 liquid capital. With those requirements, we were running into a lot of stumbling blocks, but we kept stumbling along, saying, 'We've got the customers. We've got the product. All we need is these locations.'"
Today, with the help of smart businesspeople like Blair Taylor, The Athletes Foot is franchising very successfully in some hitherto untapped urban markets. In many ways, however, it's business as usual.
Entrepreneurial Franchises Help Knock Down Barriers
Blair Taylor is an extraordinary entrepreneur: savvy, determined, politically connected and visionary. He happens to be African American, too, and for The Athlete's Foot that's a very good thing.
Russ Smith explains why. "Our initial inner city concept began with Blair Taylor in California. Blair came to us through the Empowerment Zone program. His idea was to revitalize the old Pepperdine College in south central Los Angeles, turn it into a franchise-only mall, with family restaurants. We worked with Blair's group-the Inner City Development Corporation-for two years to get that project up and running, but we couldn't make it work. So we offered them one of our corporate locations in Brea, CA, in an upper middle class suburban mall just so they could gain franchising experience. Now they have three locations."
The story proves what smart franchisors have known all along. The franchisee makes the difference and no one-majority, minority or female-fits a pigeonhole. "It's entirely possible for a single franchise owner to have one inner city location and one upscale mall location. In fact, we've found it works well," Smith says.
Blair Taylor agrees. "We're focusing on urban development, but also focusing on the broader market development.. There's an advantage to being successful in both. You bring in additional credibility. You bring in additional resources. You bring in additional relationships. Particularly for minority businessmen, it's advantageous to be able to live in both worlds."
Taylor will also tell you that the two-year Pepperdine project, though failed, was a valuable experience. "We're in the business of executing and it's hard when you're told to hurry up and wait.
But the experience solidified relationships over that two years with companies like The Athlete's Foot, which enabled us to become the area developer and their biggest franchise owner in the west."
Taylor also nailed down some political relationships. "I'm on the Los Angeles Enterprise Community Oversight Committee and the HUD formed initiative for Urban Development, as a direct result of being involved in the urban development projects and continuing to stay involved. There also are several other appointed positions -- the Urban Land Consortium that I'm a part of -- and contacts in the Council office and around the city in general."
No wonder additional urban projects are popping up all over. "We just opened a Mail Boxes Etc. in urban Los Angeles, with plans to open more. We are in the process of opening an Athlete's Foot urban store in LA, and we've got a couple of other potential urban franchise concepts we may be working on in the near term as a result of that experience."
Perhaps making a less than ideal situation turn into a winner defines a successful entrepreneur. As Taylor puts it, "At some point, you will find a way to make use of what you learned."
Women Shape Franchising, Too
ComputerTots was founded by-and is owned by-women. Eighty-five percent of the franchise owners are women, too. Does that affect the way this company does business? No, that defines it, says director of PR and marketing, Karin Machusic.
"We tend to find people looking for quality and balance. The last time I checked, making a ton of money was not anyone's top priority."
That's not to say ComputerTots franchise owners can't be wildly successful-simply that they achieve and measure success in their own terms. The attitude comes from the top.
"In the beginning, the founders kept ComputerTots small purposely. They didn't try to expand quickly, because they wanted to put quality in place first. That decision was in the face of some men they knew, who were prompting them to go public, and do it quickly-a male impetus, but not one they followed."
Today, founder Karen Marshall, chairperson of the International Franchise Association's Women in Franchising Network, will tell you that, in retrospect, she and Mary Rogers-her partner at the time-made the right decision in controlling the growth of the company. "It was a big issue to keep their families part of their lives, so they made a choice in favor of family."
At Decorating Den, women have been influential, too, both in management and at the franchise ownership levels. Senior vice president Susan K. Pelley, who has been with the company for 24 years, believes women offer a valuable perspective to company policy. "Women shape our marketing decisions, particularly in terms of 'relationship marketing,' which is very important to us. Our franchise owners are aware of client's time constraints and we work around those challenges by making appointments on weekends and in the evening."
For a company like Decorating Den-which brings thousands of interior design choices to the client in a van-merchandising diversity has always been part of the offering. "Our franchisees cater to a market comprised of homeowners 35 to 55 years old, with double incomes, living in upper middle class communities. A minority franchise owner might begin her business by target marketing to a particular ethnic community because, at first, that seems natural. But over time, she'll end up serving a broad clientele."

® copyright 1999 Nancy Rathbun Scott
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