Franchising | November 2012 | By Mary Avant
A New Age for Women
This is not the 1950s. Women aren’t confined to the home, cooking, cleaning, and caring for the kids (unless they want to, of course), nor can they only find work as secretaries in a male-dominated corporate world. No, today, women have power: They can balance work and family life; they can excel in any profession; and, just like men, they can own their own businesses.
But men and women don’t always stand on equal ground when it comes to the business world, foodservice included. Women still earn almost 18 percent less than men, according to the Institute for Women’s Policy Research, and more men than women own businesses by a long shot.
In fact, based on the International Franchise Association (IFA) Educational Foundation’s “Franchised Business Ownership: By Minority and Gender Groups” report published in November 2011, just 20.5 percent of franchised businesses were owned by women in 2007. That’s compared with men’s 56.1 percent share (24.4 percent of franchised units were jointly owned by males and females).
In the quick-serve segment in particular, women owned just 12.3 percent of franchises that year, while 27.1 percent of units were jointly owned.
Though the numbers still lean decidedly toward men, the state of women in franchising today is largely on the up and up, thanks to shifting demographics, growing female independence, and franchisors’ desire for a stronger female presence in their company. And many believe the quick-service industry stands to prosper from the trend.
The spunk factor
As Bob Dylan once said, “The times, they are a-changin’.” As of 2010, there were almost 5 million more women than men living in the U.S., according to the U.S. Census Bureau, a trend that’s predicted to continue. And because women are now also the primary decision makers—and, consequently, consumers—in the home, more women are buying into franchising, where they can cater to the growing number of female consumers,
says Miriam Brewer, senior director of education and diversity at the IFA.
“Women have a unique way of looking at a product,” adds Susan Chrisman, a McDonald’s franchisee with six units throughout Louisiana. “Because they’re the mother and they very often control the money and are making purchasing decisions, … they’re going to look at things just a little bit differently than a man will.” She says this translates to the brand, too; companies need women in their franchising pool to help them understand the female market, better determine what women are looking for, and find ways to stand out to female customers.
Thanks to growing independence and power in the family, Brewer says, females today are going into business at a faster rate than ever before, and that includes opening franchise locations.
And for franchisors, this news couldn’t be better, as female franchisees have plenty to offer.
“If a woman decides that she’s going to sign up to be a franchisee in the restaurant business that is very competitive, then I know there is a tremendous amount of energy and confidence and sort of spunk that I have a true affinity for and a lot of respect for,” says Hala Moddelmog, president of Arby’s.
This spirit, coupled with the fact that women are often highly organized and great with detail, makes them excellent restaurant managers and operators, experts say. This is only enhanced by the fact that they often have a knack for analyzing each and every business decision.
“Men analyze, too, but sometimes I feel like women go a little more in-depth in their thinking and think everything through 100 percent,” says Samantha Goldsmith, a seven-unit Red Mango franchisee and the brand’s youngest multiunit owner. “They always want to know the outcomes or the possibilities. They always make hypotheses about what’s going to happen.”
Perhaps one of women’s biggest strengths is their ability to empathize and relate to employees, customers, and the franchisor. “Having a franchisee that naturally has an affinity for leading and guiding and mentoring young employees … is a huge advantage for the success of that franchise,” says Kat Cole, president of Cinnabon.
Abby Bridges, a multiunit franchisee for Smiling Moose Deli, says her good rapport with employees undoubtedly contributes to her units’ success. “I know their name, their kids’ names, their birthdays, what they’re going to school for,” she says. “And I don’t think you always get that. I think that women make it more personal.”
These characteristics also mean women are natural community builders, Cole says, and they “want to open up their arms and embrace a community.”
Kerry Olson, vice president and assistant general counsel for International Dairy Queen, says this tendency for women to be involved in the community around them—be it in schools, churches, sports teams, or other organizations—is proved to increase unit-level economics.
With all of the perks women offer, brands would be wise to spend concerted time and effort recruiting women to their team. But with franchising’s low popularity among women, it might be easier said than done.
Cinnabon’s Cole says more women are pursuing “their own burning idea for a concept,” but not as many of them “immediately look at franchising as one of their options to either get out of corporate America or add to their entrepreneurial portfolio.”
In other words, it’s not that women are choosing not to become quick-serve franchisees, they just don’t know this option is available to them. “If they don’t take advantage,” McDonald’s Chrisman says, “it’s just because they haven’t seen the opportunity.”
To increase their visibility with women, Cole says, brands should connect with organizations and communities that tend to attract successful women, such as the Women’s Foodservice Forum (WFF) and female leadership centers at local universities.
“There are tons of executives in [the WFF], and many of them are coming to the end of what they would call their corporate career and looking for the next thing,” she says. “Some of them end up becoming investors; some of them end up becoming venture capitalists; but others end up becomingfranchisees.
“It’d be such a shame to miss out on that talent,” Cole continues. “Franchise concepts would be smart to find those organizations, invest in them, and become a part of what they do.” Not only does tapping into these resources open up a world of opportunity in terms of female franchisees, but brands that become involved in these organizations and communities are also seen as more multicultural and progressive. And franchisees—especially females—will be drawn to that, Cole says.
Further, she encourages female franchisees and those women in foodservice leadership roles to speak up, share success stories, and become mentors to potential or existing female franchisees.
“It’s about franchised brands touting their successful female franchisees and elevating their successful female executives, so women who are entrepreneurial and want to get into business can do so,” she says. “Franchisors need to speak to women and say, ‘Look, we know you want to be in business for yourself. We know you want to do your own thing. Don’t do it alone. Do it with a franchise, and do it with us.’”
The need for creativity
Unfortunately, women often face an uphill battle in franchising. For example, women franchisees can have a much more difficult time obtaining financing.
The IFA Educational Foundation’s report shows that while 24.9 percent of franchised businesses bringing in annual receipts of $50,000–$99,999 are owned by women, just 22.7 percent with gross revenues between $100,000 and $249,999 and 16.9 percent between $250,000 and $499,999 are female owned.
The fact that women typically run smaller businesses can potentially lead to less favorable lending conditions, according to the U.S. Department of Commerce Economics and Statistics Administration’s (ESA) “Women-Owned Businesses in the 21st Century” report released in October 2010. The report also shows that many women don’t apply for loans in the first place, simply out of fear that they’ll be turned down.
This trend not only makes it more likely that fewer women will turn to franchising, but also means that when they do, they’ll be starting out with less capital and are less likely to take on additional debt to expand their business than men. Indeed, the ESA study shows that from 2002 to 2006—even before the recession—women launched businesses with just 64 percent of the capital men brought to the table.
To make the transition into foodservice franchising a bit easier, an increasing number of women are looking at the option of joint ownership, choosing to work with a male partner, be it their spouse, sibling, friend, or business associate.
Smiling Moose’s Bridges found her footing in the franchise business by partnering with a male who was already involved in the brand’s franchise system. She says the move helped pave her path to franchising. When she opened her first unit two years ago, she was Smiling Moose’s first female franchisee; today, one-third of the brand’s franchisees are female.
“When I signed on, there were no women in the upper management, no women running stores,” Bridges says. “So I think they were looking for that female presence in their stores.”
Another factor that may be leading potential female franchisees to turn away from the business is the fear of stifled creativity. In general, women are known to be more creative and innovative than men, which can make the idea of working in a franchise—where they follow a set of practices, rules, and standards set forth by the franchisor—seem off-putting.
Moddelmog says that while more women are going into business, they aren’t tending to go into franchising at the same rate as men, possibly because they want to shape their own business.
“One of the goals I’ve had in my career is to make sure that women realize that they have an ability to use their creativity within a franchise situation,” Moddelmog says. “They certainly have the ability to use their creative problem-solving skills; they have the ability to use their leadership skills; and I’d like for women to have a better appreciation for the chance for truly creating wealth for themselves when they buy into an operating system and a brand that’s already there and already successful.”
Goldsmith says Red Mango’s franchise support staff is always open to new ideas and a set of fresh eyes to help figure out ways in which the business can operate more effectively and efficiently. “They listen and hear you out, and they discuss why they would or wouldn’t do [what you suggest],” she says. “They appreciate the fact that women do think about things that may not have been thought about before and bring things to the table.”
The land of opportunity
Though women still struggle to gain the same footing as men in the franchise world, the IFA predicts women and ethnic minorities will be the majority of franchise owners in as little as 10–15 years. Brewer says the IFA’s goal is for “franchising to mirror the changing demographics in the United States” as a whole.
She adds that as the economy picks up and access to credit thaws, “more women will be willing to give franchising a second or third look.”
In addition, because there are now more women in leadership roles in the franchising world than at any time in the past—from executive roles like president and CEO to franchise development and sales positions—women will begin to look at female-led franchises and think, “I can do this, too,” Cole says.
Brewer says the addition of females to brands’ franchise development staff can go a long way in recruiting women. “When you feel as though you’re supported from all levels,” she says, “then you’re going to do better and you’re going to be the best person possible.”
With more brands now taking notice of female franchisees’ upside, Olson says, this will continue to catapult their level of involvement in the franchise world.
“Opportunities are out there and brands are becoming more aware of the qualities of women leaders and the quality of having women in the ownership structure of your franchise system,” she says. “That will only continue to increase.”
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