Minorities, women have big stake in franchised businesses: IFA Educational Foundation issues comprehensive report on minority, gender-based franchise ownership.

Author:Reynolds, John
Position:FW FOCUS: RESEARCH - International Franchise Association

In 2002, the latest year for which U.S. Census data is available, nearly 20 percent of all franchised businesses were owned by minorities. Twenty-five percent were owned by females, and another 17 percent were equally male-female owned.

These are among the major findings in the first comprehensive report published by the International Franchise Association Educational Foundation. The report, prepared by PricewaterhouseCoopers LLP, is based on data from the U.S. Census Bureau's 2002 Survey of Business Owners.

The report, entitled "2002 Franchised Business Ownership By Minority and Gender Groups," presents statistics in two ways: First, the proportion of franchised businesses that are owned by each minority and gender group; second, the proportion of all businesses owned by each minority and gender group that are franchised.

The report also views at the percentage of franchised businesses owned by minorities and women in the Food Service and Drinking Places business category (NAICS sector 722), which has a high concentration of franchises.

Purpose of Report

"The rapid growth of the Hispanic, African-American and Asian segments of the population continues to create many opportunities for American businesses," said Matthew Shay, president of the International Franchise Association. "This report gives us the first comprehensive look at the composition of the franchising industry by minority and gender groups. Franchised businesses, which account for nearly 10 percent of the private-sector economy, can play a major role in providing greater opportunities for business ownership for minorities and women to enter the economic mainstream."

More than 220 IFA member-companies participate in the association's MinorityFran program, which is working to increase the number of minority franchisees, employees and suppliers. Since April, IFA's Diversity Institute has conducted more than a dozen seminars on "Franchise Opportunities For Women, Minorities and Veterans" in major U.S. cities. The Diversity Institute is working with other major national organizations, such as the National Urban League, the Association of Small Business Development Centers, and the Minority Business Development Agency to provide education, resources, and technical assistance to women and minorities.

Major findings of the report

Minority Ownership Rates

In 2002, 19.3 percent of franchises were owned by minorities, compared to 13.2 percent of non-franchised businesses that were owned...

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