Franchising: An Entrepreneurial Opportunity. (Special Advertising Section)
Brown, Carolyn M., Black Enterprise
Travel to any town in America and you are bound to find a franchised business: one in which you buy the right to run a brand name business and sell its products. One of the fastest growing segments of American business, franchising is an ideal partnership for an independent entrepreneur. As a franchisee not only do you buy the right to the company's name, trademarks, products, business procedures, marketing, advertising, and other components unique to that particular business, but you are backed by the substantial knowledge, skills, experience, and financial strength of the franchisor. For would-be entrepreneurs, franchising provides an affordable means of accelerating expansion, achieving development goals more quickly than might otherwise be the case and with far less risk.
Even if you are not the typical, risk-taking entrepreneur, you may be suited to running a franchise, says Sonya Thorpe Brathwaite, director of diversity and emerging markets with the International Franchise Association in Washington, DC. That is because instead of starting your business from scratch, you're running a business with a proven track record. "You are in business for yourself but not by yourself." Whether it's accounting and financing, advertising and public relations, personnel management, purchasing or inventory control, franchisors are there to provide hands-on, one-to-one assistance. While franchising does provide great opportunities, it does not create miracles. You must combine knowledge and resources with entrepreneurial drive and spirit.
Fast-food giants McDonald's and Burger King automatically come to mind. However, there are more than half a million franchises operating in the United States generating more than $1 trillion in retail sales. The people who draw their paychecks from franchising come from all walks of life--from recent college grads to downsized corporate professionals.
More minorities are discovering franchising opportunities thanks to increasing recruitment efforts by companies such as Wendy's, Merry Maids, Jan Pro, and Interim Healthcare. The IFA Educational Foundation has received a significant number of donations to increase diversity within the franchise industry, including educational grants of $250,000 from Coca-Cola Corp. and $150,000 from Marriott Hotel. Moreover, a strategic alliance was formed between IFA and the Minority Business Development Agency to help groom and develop more African American franchisees.
Access to capital remains the critical key to opening the door of franchise ownership. Some franchises sell for as little as $1,000, but the average franchise costs about $150,000 in total start-up costs. Franchising in and of itself does not end obstacles that otherwise competent and capable minority entrepreneurs face, but there are a growing number of banks and venture capital firms that are starting to earmark funds for minorities and women interested in owning a franchise. Start by contacting your state economic development office to find out what financial resources are available in your area.
A great resource, the IFA is the largest and oldest industry trade group, with members operating in more than 75 industries including construction, weight loss, daycare, hotels and motels, and travel agencies. IFA's Franchise Opportunities Guide provides a list of franchise companies ($17 plus $6 for shipping and handling). Call 800-543-1038 or visit www.franchise.org/boookstore/bookstore.asp. You can also get a copy of the Business Opportunities Handbook by calling or visiting www.franchise1.com. Another source is Franchise Times ($35 a year; 651-631-4995 or www.franchisetimes.com), which addresses the needs of prospective and existing franchisees. The Franchise Network (www.bison1.com) is a major resource of information for franchisees, and FranCorp (www.francop.com) is the world's largest consulting group for franchisees. …