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Franchise Opportunities Increase For Women and Minorities
by Dan Kirwan

It's perhaps a mark of the evolving American business scene that ever-greater numbers of women, minorities, immigrants, and young people are joining the ranks of American franchise owners. More remains to be done, to be sure. But things are looking up.

For all the gains, however, it still can be challenging for non-traditional entrepreneurs to identify a quality franchise opportunity, negotiate and finalize an agreement that protects their interests and obtain the necessary funding to get the business up and running.

So how can you "run the gauntlet" and land your own successful franchise as a female or minority business person? And what new programs are in place to help you?

For all aspiring franchisees, the best place to start is with a qualified franchise consultant. These professionals, listed under "Franchise Consultants" in the directory section of this publication, are independents who work with individuals to identify franchise business models that suit the person's strengths, weaknesses, goals and desires.

The process centers on a series of interviews, after which the consultant will usually present several different franchise concepts for review. The consultant then forwards all of the candidate's paperwork to the franchisors selected; their responsibility then is to contact the candidate and lead him or her through the evaluation process.

In most cases, the franchise consultant charges no fee to the applicant. Instead, if or when a franchise is sold to the individual, the consultant receives a referral fee from the franchisor who consummated the purchase.

While all franchise companies are required to give equal consideration to candidates regardless of background, some franchisors are more proactive than others in reaching out.

At The Maids Home Services, for example, we make sure our consulting partners are aware of our desire to incorporate minority, female, and younger candidates into our franchisee organization. We also make use of opportunities at trade shows we attend, such as the International Franchise Association (IFA) Show, by explaining franchise options to female and minority visitors.

The IFA, incidentally, can be extremely useful in helping aspiring non-traditional business owners come into contact with suitable companies through its minority and women's programs.

The Women's Franchise Committee (WFC) of the IFA, founded in 1996, provides informational and networking opportunities at both the local and national levels. In addition to its annual leadership conference at the IFA convention, the WFC has a growing network of local franchise chapters that enable anyone, IFA members or non-members alike, to learn about companies seeking female entrepreneurs.

The IFA's Minorities In Franchising (MIF) Committee is an excellent means for serious minority candidates to come into contact with franchisors interested in expanding their minority ownership base.


NATIONWIDE NETWORK

The MIF is also linked with minority recruitment programs in cities around the country that help minority candidates find franchise opportunities and professional business services. Some even help finance a franchise purchase through in-house loan funds.

One of the most overlooked avenues for minority recruitment is the E-2 Treaty Investor Visa program administered by U.S. Citizenship and Immigration Services (formerly the U.S. Immigration and Naturalization Service).

This program specifically helps entrepreneurs in foreign countries establish and operate businesses in the United States. The individual must meet certain minimum investment, participation and employment requirements, after which he or she is eligible for indefinite U.S. residency.

By working through franchise consultants who specialize in E-2 visa arrangements, The Maids Home Services has sold franchises to a number of exceptionally qualified foreigners.

The purchase transaction typically takes four to six months longer to process due to the additional visa paperwork; nevertheless, the E-2 visa program is a powerful vehicle for obtaining a business franchise.


Some franchisors are more proactive in reaching out to women and minority candidates.

Of course, identifying one or more businesses you'd like to own is just the beginning. You also must satisfy the franchise company's requirements, including financing. Fortunately, there are creative ways to accomplish this step as well.

While every franchisor's priorities differ, in the case of The Maids Home Services we believe a good candidate must have three essential elements at his or her disposal: a fertile, well-defined sales territory; a powerful belief in our business concept; and sufficient startup capital.

Let's examine each of the "ingredients for success" individually. The first, identifying a territory with suitable demographics, is critical because without enough households of sufficient income to support your business, you're going to have a very hard time sustaining your franchise. Fortunately most companies will work with you to define a suitable market area.

A bit tougher to assess is the second requirement. Only extensive interviews with company recruiters will reveal if you have the necessary understanding of, and enthusiasm for, the company's unique business approach. All the training and development assistance in the world won't make up for a candidate who doesn't believe in what a business is all about.

To be a successful owner, people also need abilities in sales, operations, and administration-or the opportunity to hire out those abilities. Our company, for example, can compensate for a lack of sales expertise through our national call center, for which the franchisee pays a modest fee.


CAPITAL ISSUES

Operations-especially the ability to hire, motivate, and retain good employees-and administrative skills can be obtained through a partner or key employee if needed.

As for the third element, startup capital, this is usually the trickiest of the three to satisfy. Yet there's no reason why someone with a lucrative territory, and the passion to service it, shouldn't be able to find sufficient financing-even women or minorities of limited financial means.

Banks, the most obvious choice, are legally required to give everyone equal consideration for small business financing. The key to landing an approval, though, is a well-written, fully developed and realistic business plan.

Look for quality business plan coaching from your franchisor as part of your franchise selection process.

Another option for financing is the introduction of an equity partner. Companies can sometimes locate a potential partner for you who has the money, but not the time, to help your franchise succeed.

As mentioned, many public and non-profit entities offer assistance to women and minorities seeking to acquire a franchise.

Some franchisors have chosen to follow The Maids Home Services in offering co-franchising, a relatively new concept. Under this plan, the company shares ownership with the franchisee, providing funds as well as periodic evaluations of the developing business.

While used most often to help existing franchisees add new markets or locations, co-franchising can sometimes be an option for new franchises as well.


Successful franchise owners need abilities in sales, operations, and administration.

While there are no guarantees when purchasing a franchise, companies with a history of success in female/minority franchise development also have a strong degree of predictability.

They can help you evaluate your strengths and weaknesses before your purchase, then set realistic expectations through annual reviews and goal-setting sessions. When you define realistic and attainable benchmarks for achievement in concert with your new company, you'll find the result, more often than not, is a happy business experience.


Dan Kirwan is executive vice president of operations for The Maids Home Services, one of the oldest and largest maid service franchisors in North America. Email Dan at dkirwan@themaids.net.
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