As the Chairman of IFA's Minorities in Franchising committee, I felt it important to share "Boom Time: How to Attract More Latino Franchisees", an article published in the August 2008 edition of Franchise Times, with you. For the story, reporter Julie Bennett interviewed me, but more importantly addressed a very compelling topic.
First, this was an out box that accompanied the story:
Tips for attracting Latinos to your brand - Advertise your products or services in Spanish media and on Spanish-language web portals, using a Hispanic advertising agency (for a list go to http://www.ahaa.org/, the site of the Association of Hispanic Advertising Agencies). Besides increasing your revenues, such ads indicate that you would be welcoming to Hispanic franchisees.
- Be Spanish-language friendly in your locations in or near Latino communities, advised Stan Friedman, a member of the International Franchise Association's Minorities in Franchising Committee. "If they love your brand as a consumer, you can convince them that they'd love you as a partner, too," he said.
- Reach out to organizations that are Latino-focused, like the U.S. Hispanic Chamber of Commerce (find your local chapter at http://www.ushcc.com/) or the National Council of La Raza in Los Angeles. LaShawn Cartwright, senior recruitment consultant for Chick-Fil-A in Atlanta, said she works with the National Society of Hispanic MBAs and the Hispanic Alliance for Career Enhancement, by speaking at their conventions and participating in their career fairs. Fifty of Chick-Fil-A's 998 operators are Hispanic and Cartwright hopes to increase those numbers.
- Reach out to colleges with high Hispanic enrollments. Angela Gonzalez-Rowe of the HHOA said her organization awards scholarships to Latino students enrolled in the hospitality program at Florida International University in Miami.
- Participate in IFA-sponsored minority events. The trade association's director of diversity Miriam Brewer said her office partners with local economic development agencies to host Franchise Opportunity Seminars around the country. Find a list at http://www.franchise.org/.
Boom time: How to attract more Latino franchisees
By Julie Bennett
As published in: Franchise Times - August 2008
Antonio Swad, of Dallas, created his restaurant chain, Pizza Patron, to serve low-priced fast food to the Latino community. Amigo (medium - $6) and Familiar (extra large - $8) pizzas have Spanish names and spicy toppings, like Chorizo sausage. Store clerks speak Spanish and all menu boards are bilingual.
But when Pizza Patron started franchising in 2003, "We looked for an area developer with a lot of capital who owned other restaurant concepts and could build multiple stores," said Andrew Gamm, the director of brand development. "We also sold a few stores to Latinos who were individual operators. But over the years we found that the individual owner-operators achieved success faster and tended to do a better job operating their restaurants. We did a complete 180 and now focus on finding more individual operators." The chain has 50 franchisees (for 70 locations), 29 of whom are of Latino descent, and hopes to attract more Latinos.
Since most franchise companies don't keep statistics based on ethnicity, we don't know how many other Latinos have become franchise owners, but many industry insiders estimate they make up only about 3 percent of the nation's 800,000-plus franchisees. If a restaurant company targeting Latinos failed to realize what good franchisees that ethnic group could provide, why should we expect mainstream franchisors to recruit them?
Because it's good for business. The country now has 45.5 million people of Latino or Hispanic descent and their numbers are increasing faster than the non-Hispanic population. So is their buying power. According to Chiqui Cartagena, author of "Latino Boom! Everything You Need to Know to Grow Your Business in the U.S. Hispanic Market," Hispanic households are larger, which means "they buy more of everything from groceries to fashion, accessories and cars." Hispanics spend a greater percentage of their incomes on shoes, children's clothing, electronics and home improvement tools than non-Hispanics, eat more fast food and, when dining at sit-down restaurants, arrive with larger groups. When Hispanics find a brand they like, they are loyal consumers.
Corky Calhoun, head of dealer recruiting - U.S. retail support for ExxonMobil Corporation in Fairfax, Virginia, said, "There's a strong business case for us to have more Latino dealers. Sixty percent of our gas stations have convenience stores, and we give our franchisees some leeway in stocking them. Someone who understands what products and services appeal to a Latino customer base will make more money, and so will we. We've had a number of Latino placements, primarily in the Miami area, but also some in New England, Chicago and Los Angeles. We would like more."
Multi-unit franchisee Guillermo Perales, president of Sun Holdings of Dallas, said he wishes more franchisors were as welcoming. Perales has 47 Golden Corrals, 78 Popeyes, 14 Burger Kings and five Denny's. Only Burger King has a program to recruit more Hispanics, he said. "I'm trying to help one of my Golden Corral managers become a franchisee by subsidizing his land and building and helping him get an SBA loan. Franchisors should be doing this by creating incentives, like reduced franchise fees or a short term waiver on royalties, to open more stores to minorities," Perales said.
He'd also like to see more Hispanics in franchising. Perales is pushing his franchisors to improve opportunities for Hispanics to buy their own units. "They don't have many Hispanics," said Perales, who has a seat on Burger King's diversity board. "Nobody has the net worth to become a franchisee."
Perales suggests programs that help longtime employees with loans or other financial strategies that help them open their own units, and he's been pushing his franchisors to do just that. "The Hispanics are a very hard-working culture," he said, adding that franchising would be a perfect fit for them. "Franchising helps you against risk. You're a part of a big system. All you have to do is follow the rules. You don't have to re-invent the wheel."
Several hotel companies, including Accor Franchising in Carrollton, Texas (Motel 6, Red Roof Inns) and Marriott International in Bethesda, Maryland, have diversity ownership programs designed to introduce women and minorities to the benefits of becoming a hospitality industry franchisee. Angela Gonzalez-Rowe, president of the two-year-old Hispanic Hotel Owners Association (HHOA) in Washington, DC, is aiming higher. HHOA's Hotel Investment Series targets high net worth Hispanics who could benefit from adding hotels to their portfolios. The association, modeled after the highly successful Asian American Hotel Owners Association, has 300 members who own or manage 150 U.S. hotels, including Michael Gallegos, whose San Diego company, American Property Management, has 45 hotels and ranks within the nation's top 25 hotel companies.
Casa Latino Real Estate in Danbury, Connecticut, ranks as the only real estate franchise targeting Latino consumers. Since CEO and founder Roberto Heering requires all franchisees and owners to be bilingual, "90 percent of our 40 owners are Latino," he said. Heering, who started franchising in 2006, said he recruits franchisees from professionals attending the National Association of Hispanic Real Estate Professionals and the National Association of Realtors events. The down real estate market is actually helping his cause, "because agents today aren't very busy and have the time to listen to a new concept," he said. "There are transactions happening. I advise Latino Realtors to join us because all you need is a seat at the table."
The same statement could extend across all of franchising. According to the U.S. Hispanic Chamber of Commerce in Washington, D.C., Hispanics now own 2.5 million businesses generating $38 billion in annual revenue. If more of them are encouraged to take a seat at the franchising table, the entire industry can benefit.
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