5 Reasons Why More Women Are Making the Choice to Become Franchisees
While the franchise industry continues enjoying steady economic growth year over year, female franchise ownership is in the midst of an economic boom.
That’s according to a recent report from the International Franchise Association (IFA) indicating that women-owned franchise businesses shot up by almost 50 percent since 2012. Women franchise owners made up 30.6 percent of the market by 2017, compared to just 20.5 percent only five years ago.
Female entrepreneurship has been on the rise for decades, just not at the rate of franchise ownership growth. In 2017, there were 11.6 million women-owned businesses, compared to 8.3 million in 2012, a growth rate of just 39.6 percent. Impressive, for sure, but not nearly as impressive as what’s happening with women and franchising.
While some women are making the choice for franchise ownership for the same reasons that their male counterparts do, there are some aspects of franchising that address issues specific to aspiring female entrepreneurs. Though past trends are no guarantee of future outcomes, the franchise industry has every reason to believe that more women will continue to see franchise business ownership as a prudent path to entrepreneurship.
1. Schedule fexibility
Recent studies show that working mothers are spending more time in the labor force than in the past, but also more time on childcare. Further, working moms are much more likely to say balancing work and family is difficult today. Many franchise businesses offer a semi-absentee model for owners, allowing them to work on their business, but not in their business. The semi-absentee franchisee may only spend 10 to 20 hours per week handling strategic development, marketing, payroll, etc., while levels of managers run their franchise units. They get to experience the rewards and freedoms of small-business ownership while still having time to dedicate to motherhood, grandmotherhood or whatever else they please.
2. Support systems
Another recent report from Guidant Financial found that more than three in 10 women surveyed lacked good support in small-business ownership. Whether it’s an issue with finding funds to open their business or appropriate mentors in the business community, a dearth of good support could leave many aspiring female entrepreneurs on the sidelines. Franchise businesses promote their support systems as one of the main reasons to enter franchising. Franchise systems take great pride in offering unmatched support, including help finding real estate, location buildout, marketing, management training, human resources and purchasing power.
3. Help securing loans
The same Guidant Financial report found that 74 percent of women in small business struggled to secure a loan. In fact, women reported that their most likely source of funding for their business was cash, money borrowed from family and friends or borrowing from their 401K. In fact, though women-owned businesses employ nearly 9 million people and generate more than $1.7 trillion in annual revenue, the average funded business loan for them was only $57,097, barely half of the average size for male-owned businesses ($103,604). Franchise systems usually offer assistance to franchise candidates to help them secure business loans to open a franchise unit. Sometimes, the loan is provided by the franchisor, other times they help candidates put together a business plan in order to secure a loan from a commercial bank. Some franchise systems even have relationships with lenders that they can refer candidates to in order to simplify the process.
4. Dissatisfaction with corporate America
Women continue to be underrepresented at every level in corporate America, a ratio of inequality that worsens at almost every stop from entry level to the C-Suite. Further, the gender wage gap ranges from $6,725 to $19,414 throughout the United States. Women looking to play on a more even field are likely to find franchising appealing because their ability to ascend and succeed is unlimited and within the proven models of success. In other words, following a franchise’s business model gives men and women the same opportunity to thrive.
5. Industry outreach
More than ever, the franchising industry is working to bring more women into the fold. The IFA offers the Women’s Franchise Committee to promote women's participation in franchising by providing international networking opportunities for the exchange of ideas, resources, and experiences. There are also Women’s Franchise Networks throughout the United States designed to develop relationships with women franchising professionals, address issues, share ideas and offer solutions related to franchising. Many franchise systems are making a point to highlight areas of their business that women have traditionally found attractive, such as community involvement, flexibility and being environmentally friendly.
Women and franchising are a mutually beneficial trend that should lead to continued improvements and outreach from the industry to help more women achieve the lifestyles and dreams they seek as entrepreneurs.
Note: Guidant Financial, whose 2018 Women in Business Trends survey was linked to in this article, has a business relationship with Franchoice, the franchise consultant firm that Jim Judy is affiliated with. Jim receives no compensation from Guidant Financial.