Human Resources | November 2016 | By Nicole Duncan

How to Fix Foodservice’s Diversity Gap

The foodservice industry might employ the most minorities, but that diversity is not reaching the top ranks. Here’s how to bridge that gap.
Nicole Enearu left a successful career in social work to become a McDonald’s franchisee. Melissa Barnes

The U.S. boasts a storied reputation as a melting pot—or “salad bowl,” in 2016 terms—where a mix of cultures, races, and creeds come together. But the reality can be far from idealized principles.

Case in point: the foodservice industry. While restaurants make up the most diverse workforce in the nation, that diversity rarely reaches management and C-suite positions. According to a 2014 survey by the Multicultural Foodservice & Hospitality Alliance (MFHA), ethnic and racial minorities account for half of all hourly employees, while women account for 52 percent. But these numbers drop significantly for advanced positions: Minorities and women comprise only 31 percent and 29 percent, respectively, of all general manager positions. At the corporate level, minority representation is even sparser: Only 8 percent of corporate executives are minorities.

“No industry has more minority employee representation than us, and yet we can’t seem to develop them to the highest level,” says Gerry Fernandez, founder and president of the MFHA. “To me, it takes commitment from senior-level officials to say that this is a priority. And if they don’t, it won’t happen.”

While there is a broad perspective nationwide that affirmative action and related programs have served their purpose and are no longer necessary, others believe such perspectives could be causing things to backslide. Fernandez points to the number of black CEOs in foodservice; about three years ago, there were six, but today there are just two (Leonard Comma at Jack in the Box and Aylwin Lewis at Potbelly). According to the MFHA, the number of black franchisees has also decreased in recent years.

“Budgets reflect priority,” Fernandez says. “If you don’t have a budget to develop your women [or] your people of color, then you by nature determine and say to that group, ‘You don’t matter; you’re not important.’”

The explanation behind these changes is hardly a simple one, but Fernandez points to poor talent acquisition and retention as being the No. 1 issue. There’s also the fact that many underrepresented minorities lack mentors and successful leaders to look up to.

A rare legacy

Nicole Enearu never wanted for a role model. Her mother, Patricia Williams, was a single parent and a McDonald’s owner-operator in Los Angeles while Enearu and her sister, Kerri Harper-Howie, were growing up. Today, Enearu and her mother work together as owners of the Williams Enearu Organization, which includes 13 McDonald’s locations. Harper-Howie is also planning to join the family business.

“For a long time, people didn’t have these types of role models,” Enearu says. “I had the benefit of having a mother who was an African-American female [and] a franchisee, and that gave me the courage and the role model to say, ‘This is something that I can do, too.’”

In the 30-odd years since Williams started her career as a franchisee, more female minorities have joined her in the ranks, but that doesn’t mean such stories are commonplace yet. “When we’re going out and speaking to different groups, … we inevitably hear people say, ‘I didn’t know there were African-Americans who own McDonald’s,’ or, ‘I didn’t know there were women who own McDonald’s,’” she says.

Given the fact that Williams had already built the business, Enearu’s entry into the field was far different from her mother’s. Williams worked as a rehab therapist before becoming a McDonald’s franchisee with her then-husband and Enearu’s father. When the two divorced, Williams kept the rights to the McDonald’s—something that, for a single African-American owner and mother, was unheard of in the 1980s, Enearu says.

It’s not to say Williams had an easy time. She faced difficulties that a white counterpart might not have, such as being unable to get a bank loan.

The question of capital

Finance remains a hurdle today for many underrepresented races and minorities. According to the public policy organization Demos, the median white household has nearly 16 times as much wealth as the average black household, and about 13 times as much wealth as the average Latino household. And with each passing generation, that disparity only grows.

The effects of the wealth gap are certainly not confined to foodservice or even business in general, but they do dampen the potential for entrepreneurship.

Even after working in the finance division of a multinational food conglomerate, Guillermo Perales had difficulty securing funding when he first sought to become a restaurant franchisee.

“At the beginning, it was really hard to get attention from any franchisor, because I didn’t have the restaurant experience or the network they wanted. It was difficult to find a loan,” Perales says. Ultimately, he secured a Small Business Administration (SBA) loan, but Perales, who was born in Mexico, suspects that his ethnicity had dissuaded some franchisors. “Sometimes we’re at a disadvantage because they feel that … Hispanics work at restaurants; they don’t own them.”

Today, Perales’s company, Sun Holdings, operates more than 600 retail units across the country, most of them quick serves, including major brands like Burger King, Krispy Kreme, Arby’s, and Popeyes. He is the largest minority franchisee in the country and eighth-largest franchisee overall, according to the Dallas Business Journal.

Despite his own success, Perales says, Latinos are still rare in the C-suite and on corporate boards. Hispanic private equity firms have begun raising money to invest in Hispanic companies, but Perales says the amounts are a drop of water in the much larger pool of private equity.

Latinos make up 17 percent of the U.S. population, making them the largest minority. And that number is only going to grow. According to the U.S. census, Hispanics will account for 28.6 percent of the population by 2060.

“It’s good for businesses to have some Hispanic CEOs for a company that has a huge Hispanic market,” Perales says. “Why wouldn’t they have somebody on the board who is Hispanic, who knows about Hispanic behavior, trends, everything about Hispanics that can contribute to [the company’s success]?”

Embracing multiculturalism

The executive suite isn’t the only area where minorities and often women are a rare find. The vast majority of brand founders are, more often than not, white males. But Leticia Skai Young-Mohan and Raymond Mohan are an exception to the prevailing trend. The pair had several factors in their favor when they opened LoLo’s Seafood Shack in New York City in 2014. The Caribbean concept is the first in their restaurant group, Island Time Hospitality, which they plan to grow in the future.

To finance LoLo’s, the co-owners, who are also married, sold their house. They originally applied for loans, but ultimately decided that they had enough faith in the brand and its viability to put their own money down.

“We had the privilege to self-fund ourselves, and that way had a lot more creativity,” Young-Mohan says. “That’s not probably a route that most people take, but it was a route that we were able to take advantage of.”

With complete control over LoLo’s, the two were able to design a menu that showcased their roots. Mohan was born in Guyana, while Young-Mohan grew up in Spanish Harlem and her father was from Belize. The resulting menu reflects that diversity, with options like Belizean Conch Fritters, Seafood Boil Plates, and Jerk Chicken with dirty rice and Johnny Cakes.

Their respective backgrounds didn’t just influence the cuisine; they also propelled them into their roles as restaurant owners. Young-Mohan credits much of her perseverance to her education. With a scholarship, she attended a private, all-girls middle and high school in the affluent Upper East Side of Manhattan.

“My comfort with being a woman in a male-dominated industry [comes from] this really strong foundation in going to an all-girls school between sixth and 12th grade. I was never in a position through my formative years to have to compare myself to boys,” Young-Mohan says.

She adds that she still faces several misconceptions as a female restaurant owner. “Being part of husband-and-wife team sometimes has its challenges in terms of perception,” she says. “Sometimes I’m looked at as just the chef’s wife and not necessarily … a part of the business, when I’m in fact the creator of the brand.”

Mohan was also instilled with a similar drive. He cut his teeth in traditional European cuisine, working with many celebrated chefs, like Wayne Nish at March Restaurant and Jean Georges Vongerichten at Vong. He says it was a great way to learn, but there were few minorities in such fine-dining kitchens. Being an immigrant, Mohan says, made him go above and beyond at work.

“You just have to work harder and learn faster in this business so you can hold your position and keep moving up the ranks,” he says. “The more you know and the more you learn, the faster it is to move up.”

The importance of mentors

Aslam Khan is the founder and CEO of Falcon Holdings, a franchise group composed of heavy hitters like Church’s Chicken, Long John Silver’s, Hardee’s, and A&W. Khan was born in Pakistan but left as a young man to live the American dream. And he certainly found it; Khan started as a dishwasher at Church’s and is today the largest franchisee for the brand.

While he did face some discrimination, he says, many of the people who treated him poorly now work for him. A combination of hard work and dedication helped him climb the ladder.

“That comes from self-motivation. … A lot of immigrants come here and do very well because of that reason,” Khan says. “Even though, today, I live in the best of the best area and I have a lot of restaurants, one thing didn’t change: the connection to where I come from.”

Although Khan thinks people of all races and backgrounds need to be proactive to advance in foodservice, he says the biggest problem in the U.S. is how people become a part of their environment. Immigrants, regardless of their origins, must blaze their own path because they have no other option. In neighborhoods marked by disparity, people can remain mired in their surroundings, Khan says.

He recalls a recent incident he observed while eating in a restaurant: A police officer brought a young African-American man into the store to inquire about a job. The manager said the restaurant wasn’t hiring at the time. Khan suspects the young man was in a nearby park—a local haunt for many unemployed youths—and the police officer was trying to force him to get a job.

“How will that guy ever get a job anyway? … We need to position these people so we then can groom them [to succeed],” Khan says. “I think there are a lot of businesses wanting to help, but you have to do it right.”

Although Khan reports that most of his employees are minorities, he doesn’t think enough is being done at the corporate level in terms of mentorship and outreach. For his part, Khan started a minority program for franchisee subsidiaries wherein he waives 25 percent of the costs. Unfortunately, out of the 17 who have participated in the program, only three or four have succeeded.

These numbers might be disheartening, but Khan has no plans to stop. The success stories make it worthwhile.

“Go find diamonds [in the rough] and train them, coach them, give them a chance, keep them under your wing,” Khan says. “I had an opportunity to do that with one Latino guy who was in docking where they load the product for the restaurant. For two years, I kept him under my wing. For two years, he was sitting next to my chair. … Fifteen years later, do you know where he is? He’s chief marketing officer of Popeyes.”

His protégé-turned-industry leader Hector Munoz says Khan was the first person to take a chance on him after college.

“Despite my inexperience at the time, he believed in me and always challenged me to be better. In fact, one of the great lessons that I learned from Aslam is the importance of having big, bold aspirational goals,” Munoz writes in an email. “I was blessed to have had him as a mentor.”

Along with mentorship, brands can help attract and retain underrepresented minorities by illuminating a path to advancement. MFHA’s Fernandez says talent acquisition and retention is the single greatest challenge facing foodservice. Other industries have more opportunities—or, at the very least, do a better job of promoting them. Fernandez says the prevailing “angst” around race, religion, and ethnicity on top of new legislation for wage hikes and overtime doesn’t help matters. These news topics give the impression that the food industry doesn’t care and is reluctant to pay its workers a competitive wage, he adds.

“The best and brightest talent has better opportunities in banking, in advertising, in finance, in insurance,” Fernandez says. “They have well-established programs to develop talent that is diverse—black, brown, women, others.”

Enter the new leadership

The dearth of minority leaders in foodservice can no longer be attributed to prejudice, or at least not entirely, Fernandez says. He sees a natural progression away from such attitudes as younger generations mature and assume more advanced roles.

And while he thinks companies still need to commit resources to hiring and nurturing a more multicultural workforce, he expects time will help move the needle. After all, Fernandez, who is a 59-year-old African-American of Cape Verdean heritage, can remember back to when discriminatory practices were the norm.

“Within my lifetime, I couldn’t sit at the lunch counter. And we forget that the restaurant and the hotel industry were complicit in denying access to people of color,” he says. “You have younger leadership coming in; they’re going to be at a place where they’re much more open to working with … people from different cultural backgrounds.”

Certain pockets around the country are also ahead of the curve. Young-Mohan says it’s like a second Harlem Renaissance in LoLo’s home territory. The neighborhood is becoming more prosperous as African-American entrepreneurs open new businesses and drive a homegrown economy.

Compared to the rest of the U.S., Harlem might feel like a multicultural bubble, but the Mohans have found it very conducive to their business prosperity and their sense of belonging.

“There are tons of black-owned restaurants. It seems there is a new black-owned restaurant opening every month,” Young-Mohan says. “We didn’t feel the pinch of these things so much because we’re in an environment that is really inclusive and celebratory, whether it’s being a minority or an immigrant or a woman.”

Spreading the good word

This is not to say foodservice lacks opportunities for a young, ambitious workforce. Young-Mohan sees a correlation between Americans becoming more open to new cuisines and a rise in minority restaurateurs and chefs.

Other industries might have appealing perks for young workers, but few can compete with the reward of owning and operating a restaurant. At least that has been the case for Enearu and her mother. Enearu, who earned both her bachelor’s and master’s degrees from the University of California, Berkeley, worked in social services for a decade before she joined the family business. Her sister worked as an attorney for a dozen years and is now joining her mother and sister in foodservice.

All three found success in other professions, but ultimately chose to enter the food industry. For Williams, the contrast between her early years and later adulthood as a savvy businesswoman is something out of the American dream.

“My mom was raised in New Orleans in the segregated South,” Enearu says. “So to come to Los Angeles and have an opportunity to own her own business was something that was completely unheard of that she could never imagine as a child.”

Enearu says she did not face the same challenges that her mother did, and in the back of her mind, she always knew she had the safety net of returning to social work. But after immersing herself in the business empire that her mother built, she says, it would be negligent to abandon the business. She also thinks her sister’s children might want to take over the family business some day and continue the multigenerational legacy.

Still, Enearu knows it’s not enough to lead by example. To truly serve as a role model and inspire others who might wish to own their own business or enter foodservice, she must get the word out.

“With every opportunity that we get to speak to people and tell our story, it’s another opportunity for maybe one or two people to hear it and for it to have an impact on their lives,” Enearu says.

She adds that it can be easy to take that responsibility for granted, given that she essentially grew up in the restaurant industry. But even a recent encounter with an African-American driver who was taking her to the airport reminded Enearu of why she must continue sharing her family’s story.

“She said the exact same thing: ‘You guys need to continue to get your story out there because people don’t realize it,’” she says. “She said just driving people around and hearing the stories of people who start off as crew and end up owning restaurants is an amazing story. I think we’re all responsible for making sure those stories get out there.”

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