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Private business ownership in minority communities is on the rise, and franchises are a significant path for aspiring minority business owners. This increase bodes well for franchisors seeking broad market representation within minority groups categorized by sex, ethnicity, race, and veteran status. Yet, it is still not proportionate to overall populations, and there are considerable hindrances to minority entrepreneurs.
Where Are We Now?
Key facts and figures will help put the current situation in perspective:
- Over four million businesses in the US are minority-owned, comprising less than 20% of our vast network of private industry. However, minorities make up 32% of the population, so there is still a wide gap. One positive nugget—minority franchisees are nearly on par with the overall population. Nearly 30% of franchises are minority-owned, compared to 18% of non-franchised businesses.
- Each year, more than 50% of new businesses are started by minority owners. This promising statistics will close the gap quickly to represent our country’s overall demographic more closely.
- For many minority entrepreneurs in the making, there is less access to business and loans and the capital needs to fund a new business.
A more equitable balance of minority-owned business makes us optimistic about the future, and we know that franchises are one of the best avenues for leveling the playing field.
What Are We Doing?
Each step of opening a new business can be tough regardless of your experience. We are proud of what franchisors and the franchise industry is doing to assist prospective franchisees. If you are a minority considering opening a business, there are many resources to research:
- Many franchisors have programs to propel minority franchise ownership where it counts—in your wallet. They recognize the value of being in underserved communities of color, and they offer discounts on fees along with payment plans that could be much better than bank rates. Remember that franchisors have a vested interest in seeing you succeed, and they will provide guidance and training every step of the way.
- DiversityFran is a program of the International Franchise Association (IFA) dedicated to promoting minority franchises to realize the American Dream. It facilitates relationships between minority franchisees and IFA member franchisors who want to develop emerging markets and increase diversity.
- An old publication of the IFA is The Minority Franchise Guide. Combined with their website, prospective franchisees will find valuable tools specifically directed to entrepreneurs from under-represented groups.
- The Minority Business Development Agency is the only federally-funded agency that fosters minority-owned businesses through events, forums, educations, training, and collaboration with other stakeholders. They provide regional offices to assist with the procurement of capital, market exposure, and contracts.
- And when you’re ready to put your mettle to the test, the Small Business Administration can pair you with marketing and financial experts. They provide pro bono assistance on marketing plans to help qualify for business funding.
Minority franchise owner pioneers before you have already discovered the value of franchising support. As we move forward towards business ownership that reflects our country’s wide backgrounds, franchises are a path where diverse business owners can—and will—thrive.
Anne Daniells is a co-owner of Enterprising Solutions, a professional services firm specializing in corporate communication and financial improvement for businesses where she shares decades of corporate and entrepreneurial experience—including franchise ownership—in her writings on business culture. She has authored hundreds of articles for publications including AllBusiness.com, TweakYourBiz.com, and MSN.com. Reach out via her website for more on where corporate culture, communication, and human architecture collide.