February marks the annual recognition of Black History Month. As such, FranNet would like to draw some attention to an impactful program run by the International Franchise Association (IFA)—it’s DiversityFran program. Begun over a decade ago in 2006 as MinorityFran, it was an initiative borne out of the IFA’s Educational Foundation’s Diversity Institute. In 2013, the initiative was rebranded as DiversityFran.
From the IFA’s website:
The mission of the IFA Educational Foundation's Diversity Institute is to increase both the number and success of minorities involved with franchising. The Institute provides educational information and programs to IFA members and prospective minority franchisees. It also participates in outreach activities to increase the awareness of franchising in minority communities.
MinorityFran provides one convenient place where minority prospects can explore franchise opportunities of companies actively looking to recruit minority franchisees. The goal is to not only increase the numbers of minority franchisees, but to send a message to all communities that franchising is a smart and affordable way to realize the American Dream of small business ownership.
One of the first undertakings of the DiversityFran initiative was to find out exactly what obstacles existed in preventing small business ownership in minority communities. The findings zeroed in on three specific areas: shortfalls in information, relations and funding opportunities. As one of its first responses, the Institute created a series of online webinars across the country, “One-Day Opportunities in Franchising for Women and Minorities.”
According to the IFA’s most recent statistics, approximately 21 percent of all franchises are minority owned establishments. Last fall, they arranged a panel discussion to discuss both progress and areas of improvement going forward. According to IFA CEO Robert Cresanti, ““Franchise businesses play a vital role in the U.S. economy, and can be an economic powerhouse within minority communities. IFA is proud to host a panel discussion that will hopefully inspire more minority business owners. There is a true pathway to success through franchising, and we are committed to ensuring that significant gains are made within minority communities through this model.”
The U.S. Small Business Association does an excellent job of tracking statistics for minority ownership and their most recent study (2016) showed the following points of progress:
- Nationwide, 29 percent of all small businesses are majority-owned by minorities, and this share is quickly increasing
- In 2012, 8.0 million minority-owned businesses contributed $1.38 trillion in revenue and 7.2 million jobs to the economy
- From 2007 to 2012, the Black/African American population increased by six percent, but their business ownership increased by an impressive 34 percent
- The Hispanic population increased by 17 percent while Hispanic-owned businesses increased by 46 percent
Exploring the issue further, the SBA found that minority business startups are on the rise for African Americans, Latinos and Asian-Americans: According to their 2015 data, African Americans represented seven percent of all new businesses, Asians represented just over four percent and Latinos accounted for over 10 percent of all entrepreneurial ventures.
The numbers themselves are impressive in presenting an overall picture, however there is still much progress still to be made. During this month, FranNet reflects on this progress and history, pledging to assist all budding entrepreneurs in their quest for franchise ownership and financial freedom.
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