More Women Are Entering Franchising -- and It's Changing the Industry
Women are buying franchises at a rate far faster than men. Now the industry is asking itself: Why?
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Robin Mainer was a longtime commissioned salesperson for an insurance company. But by the time she turned 51, those commissions had dried up. She needed to figure out what, as she says, she wanted to do when she grew up. Mainer and her friend and co-worker Kimera Shepler decided to think hard on it and come back with a plan.
"I went home and prayed about it," Mainer says. "I said, I want a clear direction. I'll do whatever you want, but I need a direction."
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The next day, she went to get her oil changed -- not expecting it to be part of that new direction. And for a while, it wasn't. The man who checked her in took her keys and told her to sit down next to two other women in the waiting area. As they waited, a male customer came in, greeted the same man at the front desk and told him he was in a big hurry.
"The employee asked the gentleman, "What kind of oil do you want? Do you need wiper blades?' All this other stuff," Mainer recalls. "I asked the other ladies, "Did he ask you those questions?' They said, "He said the same thing to us that he said to you.'"
Mainer confronted the man. "You asked that male customer all those questions, and you didn't ask us any," she said.
The man replied, "I didn't want to have to explain it all to you."
There was an audible gasp from the women in the waiting area. "Oh, no, he didn't," said one. Then they all pounced on the hapless employee.
Mainer and her two sisters in outrage ended up getting their oil changed and their tires rotated for free that day. And Mainer got her direction after all. Her brother, who was in the auto industry, suggested a couple of days later that Mainer and Shepler buy an Honest-1 Auto Care. It pitches itself as a "female-friendly" auto care franchise, with child play areas, baby changing facilities, HDTVs, complimentary beverages and other family-friendly amenities. Before her brother could even finish explaining, she was already halfway to yes.
There are a lot of women like Mainer and Shepler in franchising these days. The numbers tell a story of rapid change: Between 2011 and 2017, female franchise ownership jumped by 83 percent, while male ownership increased by only 13 percent. That's according to FranNet, a company that matches individuals with franchise opportunities. (And yes, FranNet franchises, too.) Today, FranNet says, 26 percent of its placements are women, compared with 18 percent in 2011.
The International Franchise Association is seeing a similar shift. Women owned 27 percent of franchise locations in 2017, it says, compared with 20.5 percent in 2007.
The franchising world is eager to understand what's behind the trend so that the industry can help speed it along even further. But the answer isn't a simple one -- in part because women come to franchising for so many reasons.
Many are attracted to franchising for the same reasons that men are. They like the ability to join a company that already has a successful track record. They like the fact that franchises come with a set of established operating procedures, vendors, HR policies and other operational details that, if not done right, can be the death of the go-it-alone entrepreneur. But some experts speculate that these qualities are especially attractive to women. There's a stereotype that women are risk-averse, but psychologists have actually found that women are just as risk-taking as men -- but they tend to prioritize risk mitigation more than men do. Why take a risk on HR when you can take a risk on something else more important instead?
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Other women see franchising as a particularly family-friendly kind of business. Shelly Sun, chair of the International Franchising Association and founder and CEO of franchisor Brightstar Group Holdings, which provides home and healthcare staffing services, hears that a lot from female franchisees. "They felt they were losing out on opportunities at work because they were trying to care for parents and children. Not that they weren't willing to work, but they couldn't do a straight 9-to-5," she says. "It was very difficult to not face a significant glass ceiling if you weren't willing to put your family to the side."
FranNet consultant and author Leslie Kuban says she hears similar things, particularly from women who come to her for help finding a good franchise opportunity. She credits social change for driving them through the door. In the past, she says, women and men were expected to have different career paths. "This generation of women has been brought up with this unspoken expectation of equality," she says. That may mean they want to run a business.
Smoothie King franchisee Tonya Brigham, 47, from Bowie, Md., fits a slightly different mold. While she built a thriving career, she wished for one that worked better with her family life. Brigham was an events and meeting producer for large associations in the Washington, D.C., area, which involved a lot of travel. "One night my 18-month-old woke up with a fever, and I had to do a cross-country trip the next day," she says. "I had to be on a flight at 9 a.m. I cried all the way across the country."
Seven years later, she finally quit that job and was a stay-at-home mom for three years before looking for her next professional challenge. Smoothie King held the promise of work-life balance -- although, she admits, it took a little while to really kick in. "In the beginning, there were 16-hour days," she recalls. Some nights, her kids would do homework and nap in the back room while she worked. "But now I'm three miles away from home, not 3,000 miles away. All day long, I'm swapping between businesswoman and Mommy. It's just a much better quality of life."
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It's not all good news. Women still represent just over a quarter of total franchise ownership. Many say they were driven to it by bad experiences in the general workforce -- or, like Mainer, encountering sexism as a consumer. And once women get into franchising, they very frequently come up against a barrier: difficulty securing loans.
This problem was referenced by every single woman interviewed for this story. Banks, they say, still make it tough for females on the whole to build businesses as large as those of their male counterparts. For Mainer, the problem emerged before she had met with Honest-1 executives to discuss buying a franchise. "One bank officer told us that little boys grow up in a garage and little girls don't," Mainer recalls. "When I asked if he wasn't loaning me money because I was a woman, he said yes."
Mainer was fortunate; the "female-friendly" Honest-1 was well-equipped to handle the problem. Honest-1 corporate stepped in to help them secure funding from a bank that had loaned money to other Honest-1 franchisees, and Mainer and her friend opened their first facility in Lewisville, Tex., in January 2017. The company told them to expect to make $750,000 in revenues in their first year; they did $1.3 million. They're already making plans to open more locations.
And that bank that turned them down because they were women?
"They've already called us asking about being part of location number two," says Mainer.
It's hard to know exactly how this problem gets resolved, or how often it stymies potential female franchisees. But this much is clear: Even when women get funding, they receive smaller loans for their franchises than men do. Yet even that stat is problematic. Bill Manger, associate administrator for the office of capital access at the Small Business Association (SBA), says, "It's possible that women may have historically opened businesses that don't require as much capital as those opened by men."
It's a kind of chicken-and-egg situation -- are small loans causing women to open low-capital franchises, or do women gravitate toward such franchises because they know it's easier for them to get smaller loans?
That issue seems to be resolving itself as more women become franchisees, albeit slowly. The average SBA loan given to a female franchisee acting as the sole owner has risen from an average size of $463,944 in 2013 to $568,475 in 2017, an increase of roughly 22.5 percent. For male franchisees, over the same period, that number has gone from $689,387 to $729,093, a 5.76 percent increase. In other words, the women are catching up with the men.
Of course, not every female franchisee's story contains an element of work-life balance, sexual harassment or glass ceilings. Sometimes it's simply the power of the brand. Cassidi Brown, a 26-year-old Forney, Tex., resident and married mother of two, is about to open her first Coolgreens franchise, a fast-casual chain restaurant featuring fresh ingredients. Why? Because she has just always wanted to own a Coolgreens.
She fell in love with the concept the first time she visited one. But the company wasn't franchising, so she set out to start her own restaurant. "I tried to build my own similar concept from the ground up," she says. "Everything I did, I was comparing it to Coolgreens." In mid-2017, the day she was planning to file the paperwork to start her company, her best friend called and told her that Coolgreens just announced it was going to start franchising. She stopped what she was doing and reached out to her beloved brand.
But no matter why women enter the industry, the rate that they're entering is raising an especially intriguing question: How will franchising be different as the genders even out?
As it turns out, we don't need to wait for an answer; many industry vets say they're already seeing a difference. Gigi Schweikert, president and COO of Lightbridge Academy, an early-childhood-education daycare franchise, says that women owners change the way a franchisor needs to do business. Women, she says, tend to be more collaborative and will share ideas more freely than male owners typically will. Franchisors need to be able to accommodate that style.
They'll also need to be ready with answers. "One thing that's refreshing with the amount of women we have as franchisees is that they're not afraid to pick up the phone and say, "How do we do this?'" Schweikert says. "We're able to smoke out a lot of potential problems because they ask a lot of questions."
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Courtney Sinelli, executive vice president of Which Wich Superior Sandwiches (co-founded with her husband, Jeff Sinelli), has noticed another plus. Female franchisees "look at their businesses from various angles, rather than just being driven by one aspect of the business, like profit," she says. "They're good at looking at how a particular issue affects the brand from, say, a PR and marketing perspective. They look at how decisions affect all areas of their business. That is a huge positive for owners."
In fact, says Sun from the IFA, it's a huge positive for all.
"In my perspective, I think women tend to be better managers, leaders and inspirers of talent," says Sun. "Every business needs employees to scale. In a small-business environment where it feels like family, women tend to create that dynamic to get the most of their people. They make them feel cared for. People root for that leader, including her employees."
Brigham, the Smoothie King franchisee, says she feels that all the time. "The people I hire are from my community," she says. "I love it when my employees tell me they've never had a boss make them feel so important." Though if trends continue, there may indeed be many more bosses like her.