Group Effort

While minorities overall have low participation rates in franchising, there is one exception to the rule: Asians are doing so well in the hotel sector that they're no longer considered minorities for purposes of recruitment.

"Our members own 35 to 40 percent of all lodging in the United States, and when you get into the mid-market to budget range, it's more like 55 to 60 percent of the market," says Bakulesh Patel, chair of the Asian American Hotel Owners Association (AAHOA).

In contrast, Grant of Choice Hotels estimates that only 35 to 40 percent of their hotel owners in the United States are minorities.

According to Patel, the lodging industry offers Asian immigrants a unique entrepreneurial opportunity-they often buy smaller locations where they can develop their skills and acquire capital, then sell the locations to other immigrants and trade up to franchise units. AAHOA has 7,000 members who own 17,000 hotels and employ 800,000 people.

While Asians dominate much of this industry, they haven't been immune to discrimination, says Patel, who points out, "In the beginning, we were stereotyped as bad operators, it was hard to get insurance for properties, and we faced discrimination from suppliers." AAHOA was formed to help combat these problems, offer training to its members and serve as an advocacy organization.

This article was originally published in the November 2000 print edition of Entrepreneur with the headline: Group Effort.