Hispanic Enterprise - February/March 2008 - (Page 52)

FRANCHISING THE HISPANIC FACE OF FRANCHISING FRANCHISING IS ATTRACTING HISPANICS WITH ENTREPRENEURIAL OPPORTUNITIES THAT OFFER LOWER RISKS, GREATER REWARDS AND DESTINY CONTROL. By Jennifer LeClaire duardo Torres ﬂed Venezuela—and the Hugo Chávez administration— for the American Dream in 2001. He found that dream in franchising. After exploring the business landscape, Torres and his partner stumbled on a junk removal franchise called 1-800Got-Junk? and bought into the system in 2003. Franchising, he says, made more sense than opening a business with no brand recognition, infrastructure or marketing support. It also made more sense, he says, than spending his days building someone else’s business. “I can work on the business, not in the business,” Torres says. “I don’t have to worry about ad campaigns. 1-800-GotJunk? has a national call center and also takes orders for pick up online. I am convinced that franchising is the best model for entrepreneurs.” Like Torres, many Hispanics are ﬁnding a ﬁt with franchising. Prime attractions include lower risks, a desire to break through a glass ceiling, and the response to mass corporate layoffs over the past two decades. At the same time, the franchising industry is reaching out to Hispanics more aggressively than ever before. The combination is bringing forth a more multicultural face in franchising. E ing has been the potential of lowering business risks by associating with an established brand name. Brand awareness is easier to attain when franchisors pool marketing resources and present the franchise as a uniﬁed front. However, franchising’s reputation for success may be an even larger incentive, according to Steve Rosen, CEO of FranNet, a franchise consultancy headquartered in Carlsbad, California. “Franchising a perfect solution for Hispanics who really want to go into business for THE GROWTH OF HISPANIC-OWNED FIRMS Hispanic-owned ﬁrms in the United States are expected to grow 55 percent to 3.2 million by 2012, with total revenues surging to more than $465 billion. The statistics are noteworthy: • Total revenues of Hispanic-owned ﬁrms will increase by 70 percent. • The service and ﬁnancial sectors project the largest growth. • More than 90 percent of all Hispanic-owned ﬁrms, and their sales volume, are concentrated in 20 states. • Together, California and Florida are home to 52 percent of all Hispanicowned ﬁrms. • The increase is expected to be a robust rate of 7.6 percent annually. SOURCE: RESEARCH AND MARKETS LOWER RISK, GREATER REWARD One of the traditional draws of franchis52 themselves,” he says. “Franchising offers a proven system that helps ensure success.” Indeed, according to a U.S. Department of Commerce study, less than 5 percent of franchise businesses were closed each year between 1971 and 1997. Compare that to a U.S. Small Business Administration study that found 62 percent of nonfranchised businesses closed within the ﬁrst six years of their existence between 1978 to 1998, and one of franchising’s beneﬁts become clear. Rosen recalls many Hispanic clients who have come to him for advice on starting a franchise because, no matter how hard they worked or how much proﬁt they generated for their employer, they couldn’t rise to higher levels in the organization. “Franchising is color blind and gender neutral, “ Rosen says. “Franchising says, ‘Your success depends on your skills and work ethic’.” The instability of corporate America has also led more Hispanics into franchising, according to Udo Schlentrich, director of the William Rosenberg Center of International Franchising at the University of New Hampshire. “People have seen their parents get laid off and want to have more control over their lives,” explains Schlentrich, who is also a member of the International Franchise Association’s (IFA) Educational Board. “Hispanics are learning that if you pick the right HISPANIC ENTERPRISE February/March 2008

Table of Contents Feed for the Digital Edition of Hispanic Enterprise - February/March 2008

Hispanic Enterprise - February/March 2008 Contents Briefcase: BIZBUZZ: Business Briefs Briefcase: Trendsetters Briefcase: BIZTECH: Virtually Meeting BizLife: Travel: Madrid's New Attraction Q & A: Mi Case es su Casa Hispanic Commerce: The Agenda Cover Story: The Top 50 Corporations for Supplier Diversity Technology: Hispanic Web 2.0 Success & Motivation: Sweetening the Deal Politics & Government: The Rescue Generation Managing: The Method Franchising: The Hispanic Face of Franchising Chamber Focus: It's Showtime Movers & Shakers: Open for Business Finance & Investing: Getting Your 401(K) on Target

Hispanic Enterprise - February/March 2008

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