Empowering communities through franchising with Kathleen Gosser
Education
University of Louisville
Kathleen Gosser
YUM! Center for Global Franchise Excellence, Management & Entrepreneurship, University of Louisville
What is the mission of the Yum! Center for Global Franchise Excellence?
KG: The Vision for the Yum! Center for Global Franchise Excellence is to empower communities to build and sustain generational wealth through franchising. Our specific Mission is to become a world class center focused on franchise education and research, specifically supporting women and people of color.
What is the current situation of Hispanic businesses in the franchise market?
KG: Data on Hispanic-owned franchises is difficult to obtain. The last full report was in 2012 by the US Census and the report is for minority ownership as a whole. Interestingly, 30.8% of franchise businesses were reported as minority-owned compared to 18.8% of non-franchise business ownership (IFA).
Another element considered in this very old 2012 report was the percent of minority-owned businesses, comparing franchise to non-franchise. For the Hispanic population (only responding firms), more franchise businesses were reported than other businesses that were not franchised. This is just a directional indicator that owning a franchise, which is a business with a proven model, is more prevalent in the Hispanic population.
There are opportunities now for Hispanics to join the franchise world. The IFA Foundation has a special focus on minorities and Hispanics are a key demographic. By the way, the IFA is lobbying for more recent data on minorities to be gathered!
What are the biggest challenges when creating a franchise?
KG: The best part about becoming a franchisee is that you are investing in an established brand with a proven business model. There are typically many other franchisees who provide support as well as the franchisor.
The biggest challenges when starting awareness, education, and capital. Many aspiring entrepreneurs are not aware of the incredible opportunities there are in franchising, in all industries. It is not just food! If you can think of it, there is a franchise. Home services and personal services are on the rise – think of painting, salons, gyms. Children’s franchises that create development are also increasing – pre-schools and tutoring services.
Having the education to understand this model is also lacking. That is why our Certificate offers. This model is different and there are nuances that are critical to becoming a franchisee. This educational content is not taught at a franchisor.
The last barrier is capital – where to get the money to invest. You can use debt or equity. It is preferable to use all of your own equity first, then approach lenders. The Small Business Administration provides much funding for franchising and is available at local banks. There are also private equity firms very interested in franchising.
Another personal challenge is that to become a franchisee, you have to be willing to follow a roadmap and abide by the “rules.” Franchising is all about consistency, as customers expect the same product and experience in each location; some folks just can’t do this!
When someone undergoes the Franchise Management Certificate program, what are the main changes your see in their business mindset?
KG: Our certificate program offers deep education on the following:
The basics of the franchise model including pros and cons. We provide the knowledge of how franchising works and the opportunities.
Legalities of the model – there are several documents that are critical to the model. These include the Franchise Disclosure Document and the Franchise Agreement. We discuss these in depth as well as current government regulations.
How to buy and grow a franchise, including all funding opportunities and a deep understanding of the costs involved. The individual also takes an assessment to see how suited they are to become a franchisee.
HR infrastructure – what that would look like in your business and how to lead the teams.
Relationship management – franchising is all about relationships and we discuss that openly, starting with the relationship between the franchisee and franchisor.
Having this knowledge can help them truly dive into franchising with both eyes open!
What would you advice future generations interested in the program?
KG: Our Certificate program provides the basics needed to fully understand the franchise business model and if it is right for you. We unpack the pros and cons and discuss the opportunities. We also provide resources for further development.
Franchising can build and sustain generational wealth. It has often been quoted that “Franchising is being in business FOR yourself, without being BY yourself.” The amount of support available makes franchising a wonderful career opportunity.
One other note – the price of entry to some franchises is not overwhelming. There are so many that do not require a building, so that cost is eliminated. Do not be overwhelmed with considering a huge investment – and you could always start by working for a franchisee or franchisor in a business that you have passion about – be sure that whatever you do, it is something that makes you want to spring out of bed each morning!
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Editor’s pick: The biggest challenges when starting awareness, education, and capital. Many aspiring entrepreneurs are not aware of the incredible opportunities there are in franchising, in all industries.
Photo: Courtesy of Kathleen Grosser
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References:
https://www.census.gov/newsroom/press-releases/2021/annual-business-survey.html