As the new Millennium nears, researchers are publishing myriad statistics showing how American life has changed in the past century. Two phenomenal changes in the business sector are franchising's dominance of American retailing, and the ascent of women entrepreneurs in American business.
Neither was a factor 100 years ago. Today, sales by franchised outlets represent 40 percent of domestic retail sales. Women own more than one-third of all businesses, and are starting new businesses at twice the rate of men. The Women's Consumer Network predicts that, by 2000, women will own 80 percent of all new businesses and control almost 50 percent of American companies. These statistics belie two extraordinary, though quiet, revolutions of our time.
One would expect these two phenomena to converge, that the growth of women entrepreneurs and franchising would result in more women-owned franchise businesses.
Not so. Women are largely absent from the ranks of franchise owners. According to Women In Franchising Inc.'s most recent statistics, the percentage of franchises in 1995 owned by women, or jointly by a man and woman, fell to 8.5 percent and 15.5 percent, respectively, from 11.1 percent and 23.9 percent in 1990. The organization claims the trend is continuing.
No one can completely explain what is discouraging women from selecting the franchise option. Both women franchisors and franchisees claim it's a perception problem: Franchising is considered a "good ol' boy" network, inhospitable to creative types and with capital less accessible to women franchisees. All emanate from basic misconceptions about franchising.
Franchising is a business expansion method governed and created by a contract. A franchisor (the concept owner or supplier) allows a franchisee to sell or distribute specified goods or services associated with the franchisor's trademarks, under specific conditions, in exchange for franchise fees or royalties. Franchising enables a company to expand its market presence without having to invest its own capital or personnel. Far from just selling hamburgers, successful franchises occupy all niches, from kiddie gyms to tax preparation centers, from gourmet cookies to funeral services.
No sound reason can explain why women perceive a barrier to franchise ownership. There is nothing peculiar about franchising that makes it less suitable for women or women less suited for it. Misperceptions are best overcome by educating women about every aspect of franchise ownership, warts and all, from skill requirements and marketing support, to franchisee statistics (not just financial, but franchisee turnover rates) and the franchisees' role in network decisions.
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