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Diversity in Franchises by Jose Torres with BuscaTuFranquicia.com

Though Hispanics are the fastest growing economic population in the U.S., the presence of Latinos is relatively low in the franchising industry according to Cindy Vanegas of HispanicTranding.net. A December, 2011 International Franchise Association study cited by Ms. Vanegas indicates that only 5.2 percent of franchise businesses are owned by those of Hispanic descent. Furthermore, in a previous article published in December 2010 at DiversityBusiness.com, Hispanic Market Advisors reported that franchises are looking for Diversity.

Jose Torres
Partly responsible for the low numbers of Hispanics represented as franchise owners is that many people are under the impression that franchises are limited to retail and fast food outlets. Many more franchise opportunities beyond just fast food and retail exist and sites like BuscaTuFranquicia.com seek to match Hispanic entrepreneurs with franchisers in several industries. In addition, the site educates Hispanics regarding the options available to them with franchises, and the site encourages Hispanic entrepreneurs to consider becoming franchisees of established and viable chains.

Franchise opportunities exist in a variety of markets, including travel, advertising, retail, automotive and service. In fact, many franchises actively reach out to Hispanic entrepreneurs because these companies recognize the importance of appeal to the fast growing economic power in U.S. - the Hispanic market.

The Importance of Diversity in Business - Diversity is important to business success, according to “
The Importance of Diversity in the Workforce,” by Barbara Kahn, Dean of University of Miami’s School of Business Administration. Kahn posits that diversity generates innovation within companies. A diverse workforce provides insight into markets that might otherwise be untapped by the business. Diversity in the workplace has changed from being simply “the right thing to do to a strategic imperative,” states Kahn.

On the same note, many businesses market to a diverse, multicultural customer base. Some are successful and some miss the mark. Diversity in business is necessary to challenge the prevalent ideas that exist in the business. What matters to different population groups is varied and often unexpected by the status quo mindset.

Diversity is necessary to bring fresh perspective to businesses. In fact, a recent study of Fortune 500 senior managers conducted by the Capital H Group found that 95 percent of those surveyed indicated that creating and maintaining a diverse workforce was a major goal. Additionally, about 95 percent indicated that a diverse workforce was a key driver of business, influencing goals and strategies within their companies.

The definition of “diversity” varies from company to company, however. Many companies do not have defined goals for diversity plans in place. In fact, definitions are ra
rely solidified in business. Eight measures of diversity have been identified by the Diversity Focus Center:

- Race
- Ethnicity
- Lifestyle
- Religion
- Age
- Disabilities
- Socio-economic Status
- Sexual Orientation

Diversity infuses insight and innovation into a company. Diversity enlightens and educates the company with regards to ethnic and lifestyle marketing approaches. Diversity in business highlights the importance of factors that may otherwise remain overlooked. Diversity opens the doors for businesses to appeal to new markets for the brand. Like other businesses, many franchises re
cognize the importance of diversity and multiculturalism with regards to their franchisees.

Franchises that Embrace Diversity and Multiculturalism Often Experience Faster Growth - Many popular franchises like
7-Eleven recognizes the importance of diversity and multiculturalism in reaching new markets and are increasing the brand’s customer base. Other franchises, such as the Marriott hotel chain, are also actively reaching out to potential minority franchisees with considerations such as support for application and royalty fees, credit enhancements, education and key money.

The hotel chain rolled out the “Marriott International Diversity Ownership Initiative” in 2005 with the goal of doubling the number of minority-owned franchises by 2010. The Diversity Ownership Initiative portfolio listed 550 new minority-owned hotels by 2010. The successful initiative earned Marriott many accolades, including the “World’s Most Admired” company by Fortune magazine.

Franchise Opportunities for Hispanic Entrepreneurs - Potential for Fast Growth - One of the fastest growing economic forces in the U.S. is the Hispanic market. Hispanics generally have a strong entrepreneurial spirit and share an excellent work ethic. Though the Hispanic market is not a homogeneous base, the market is unified by language. A franchisee who speaks Spanish and caters to a Hispanic population in a neighborhood that is largely comprised of Latinos will likely to gain the business and the loyalty of the community. Tapping into the Hispanic market poses fast growth potential for franchisers and franchisees alike.

The Hispanic population in the U.S. is experiencing exponential growth. In 2012, 16 percent of the U.S. population identifies as having Hispanic origins. As the Hispanic population grows, so does the buying power of the Latino population. Currently, the buying power for the U.S. Hispanic market is estimated to be about $1.5 trillion per year, making the U.S. Hispanic market the ninth largest economy in the world. Franchises that actively establish their brand in Hispanic communities insert themselves at the ground floor of a burgeoning phenomenon.

Franchise systems are beginning to recognize the importance of the Hispanic market and many are creating initiatives that reach out to Hispanic entrepreneurs.
7-Eleven, for instance, is reaching out to Hispanic entrepreneurs through various channels where Hispanics converge. The buying power of the Hispanic market has increased 347 percent between the 2000 US Census and the 2012 Census. Because the Hispanic market is virtually untapped for many franchises, these businesses are seeking to attract minority, and particularly Hispanic, franchisees and to establish brand locations in Hispanic communities.

Franchises Enrich Local Communities - Opening franchise opportunities up to Hispanic franchisees is an excellent business decision for franchisers, as well as for the local community. Franchises that are owned by Hispanics in neighborhoods that have a large Latino population enrich the local community by providing jobs, as well as goods and services. Successful businesses support the local community with tax revenue. In addition, successful franchises provide the neighborhood with the thriving business of a well-known brand. The more thriving businesses that are represented in the community, the more vibrant and successful the local community will be.

Hispanic-owned franchises also represent the brand well to other members of the Hispanic community. Franchise brands create goodwill by creating opportunities for Hispanic franchisees in local Latino communities. The reputation of the brand is likely to be perceived as positive and well-received within the community.

Other positive influences on the community would include the franchisee’s community support and charitable efforts. Because many Hispanic business owners give back to the community, franchises are well-represented by conscientious and industrious franchisees.

Diversification in the Franchise System - Diversity within the franchise system increases the market reach of the brand. On the local level, the brand has visibility in the Hispanic community. However, on a larger level, Hispanic entrepreneurs are able to provide valuable insight into changes that may be made to the market strategy or product to more readily appeal to the Hispanic market. For example, adding a particular brand of apparel or a beauty product to the franchise line may dramatically increase revenue in the Hispanic community. Such feedback into the franchise system is a valuable asset for the franchise brand.

Marketing strategies may also be tailored to reach a larger audience with input from Hispanic entrepreneurs. The Hispanic population tends to respond to marketing strategies that differ from mainstream appeal. Insight into marketing strategies that appeal to a Hispanic audience may be beneficial for the franchise brand.

Diversification in all sectors widens perspective and introduces innovation. The franchise system is no exception. Brand appeal to the Hispanic population is quickly becoming an important goal for many brands. As franchisers seek to widen their customer base, the Hispanic market is an obvious market that, in many cases, is yet to be fully mined. Feedback and insight from Hispanic entrepreneurs is an avenue for franchisers to gain knowledge about how to market their brand to this economic powerhouse.

Franchises Are a Viable Option for Hispanic Entrepreneurs - Franchises are now a viable business option for Hispanics who possess the means and business acumen required to start the franchise. When a Hispanic entrepreneur is able to start with a proven business and brand, the entrepreneur receives the necessary support and know-how from the established brand. Many franchisers are now implementing programs to attract multicultural franchisees. As more franchisers recognize the importance and the benefits of marketing to the U.S. Hispanic population, companies are offering start-up assistance in many forms to Hispanic entrepreneurs.

Currently, an estimated 2.5 million Hispanic entrepreneurs own thriving businesses in the U.S. The entrepreneurial spirit is alive and well in the Hispanic community. Many, if not most, Hispanics seek to have their own business and work for themselves. Some experts estimate that by 2015, the number of Hispanic business owners will increase to 5 million.

According to the article, “
Best Franchises for Hispanics,” published on Poder360.com, the top five franchises that actively seek Hispanic entrepreneurs as new franchisees include:

- Anytime Fitness
- Burger King
- Church’s Chicken
- Coverall Health-Based Cleaning System
- CruiseOne Cruise Specialists

Though some franchisers are specifically targeting Hispanic entrepreneurs as possible franchisees, this group is often overlooked. Even though 75 percent of Hispanics in the U.S. are bilingual, many prefer to converse in Spanish. However, few franchiser websites include a Spanish section to appeal to bi-lingual and Spanish-speaking individuals. Hispanic entrepreneurs often interpret this oversight as the franchising company not being “Hispanic-friendly.” The goal of efforts such as
BuscaTuFranquicia.com is to match franchisers that have expressed a desire to reach out to Hispanic entrepreneurs with Hispanics who have the capital and who seek to own their own businesses.

 

| Contact: | Jose Torres | BuscaTuFranquicia.com | Phone: 305.972.3014 |  jtorres@buscatufranquicia.com  |website: www.buscatufranquicia.com |





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