Women have been involved in franchising for years. They were,
however, more often unseen powers behind the scenes; the people who
watched the store while their husbands brought home the business
deals.
Times are changing. According to the International Franchise
Association, women currently own about 38 percent of all
franchises, mirroring the number of women-owned businesses
nationwide. What's different today is that more and more women
are signing their names on the dotted line beside men and are being
legally recognized as business owners.
Not only are more women buying franchises--they're buying
franchises "outside of the traditional women's areas. And
a lot of women are even multiple-unit owners," says Ann
Hurwitz, a partner with the Dallas law firm Piper Rudnick, who has
represented the franchise industry for 20 years. "Women are
getting positions of power within franchises, and franchisors have
started to appreciate that women are very good at franchising on
both sides of the table. Franchising is a relationship-driven
industry, and women are good at managing relationships as well as
business."
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Hurwitz adds that within the past four or five years, industry
leaders have worked to push the issue of women's involvement in
franchising to the forefront.
New Attitude
While most women franchisees are co-owners with their husbands,
about 10 percent of franchises are owned solely by women, says an
SBA report.
Betty Russotti has represented both sides of that coin-she
started a company with her husband and ended up owning a franchise
alone. In 1982, Russotti and husband Tom, who were living in Denver
at the time, opened Shipping Connection, then opened a second store
six months later.
The couple franchised 20 stores, then divorced in 1992. Russotti
sold Shipping Connection to Florida-based Speedy Sign-a-Rama (now
called Sign-a-Rama)
in 1995 and went to Florida to work for the company. "In 1999,
Sign-a-Rama sold [Shipping Connection] to PostNet, and
in the transition, they gave me a store," she says.
But this time, the 51-year-old North Palm Beach entrepreneur was
running the whole show. And the number of women joining her in the
franchise ranks was on the rise.
"There are more opportunities for women and minorities to
get into franchising with financing programs and loans," says
Russotti. "Franchisors are starting to realize 'We
can't be an all-white, male franchise. We need to look to women
and minorities and help these people get into
business.'"
What prompted this turnaround in the past decade? A report by
Matthew C. Sonfield, a professor at Hofstra University in
Hempstead, New York, points out that lawsuits and advocacy by
government and civil rights organizations prodded many
corporations, including franchises, to move in that direction. Now,
some franchisors have made recruiting women and minorities a
front-burner issue. The benefits to these franchise companies:
Besides adding to their corporate tills, companies also get entrees
to markets they hadn't considered through women and minority
franchises.
Still, financing remains a
major challenge, explains Hurwitz. "Getting [loans] is
difficult, especially if you're just getting started."
Prospective women franchisees face a double whammy. "A lot
of lenders don't understand franchising," says Hurwitz.
"And women [who want to buy a franchise] may not have the
resources to offer additional collateral."
However, some potential franchisees have gained a foothold by
taking advantage of assistance programs created by major
franchisors such as 7-Eleven,
KFC
and Thrifty Car
Rental. Such special financing and support programs help
prospective women and minority franchisees overcome some of the
challenges they've faced.
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