Lost opportunities: Franchisors adrift on a sea of color

If franchisors want to be effective, their sales teams need to reflect the demographics of those they sell to. At the very least, they better naturally gravitate to and know how to relate to others outside their Caucasian background if they want to plug into a larger slice of new prospective customers.

I saw this phenomenon as my friend and I walked around the West Coast Franchise Expo. As 40-something year-old males, both of us are executives and quite similar, except my friend is white and I am of Chinese descent. Franchise development managers stared at my friend from the right while dozens of others stared from the left. As my friend was pulled to the side by numerous salespersons, one managed to engage me in discussion but then after a short while spoke more with my friend. I guess I'm a little harder to read. The two of us joked about it afterwards.

Contrary to impressions from the photo above, this shot is not taken in Idaho. White salespersons are selling to caucasion attendees on an aisle at the Expo in Southern California. Whites here weren't nearly as numerous as the ocean of minorities who walked by.

I’m a businessman with conservative Asian values. I don’t like to rock the boat and I certainly am not a diversity activist. Assuming there were roughly 200 exhibitions, and each booth had two staff, of the 400 odd franchising staff, there were some women at the booths, a Latino or two and a few blacks.

The majority of the population in California, particularly Southern California are not white. The languages spoken by the participants at the Expo sounded like a mini United Nations, conversing in Mandarin, Cantonese, Korean, Vietnamese, Spanish, Russian, Hindi and others. This ethnic mix is just a precursor of things to come, not just for Southern California but a country that is also growing more diverse. Franchise development departments had better get comfortable approaching, understanding and selling to “minorities” quick. That is the new world.

There’s more. Besides minorities, franchisors surely must be aware nowadays that sizeable parts of franchise buyers are immigrants, to say nothing about the potential of women immigrants. This is a rich market that is capable of accessing considerable financial resources from untraditional ways. Finance departments had better get to understand these dynamics if they are going to approve such franchisees.

Having said all of the above, the organizers of the West Coast Franchise Show were on the ball. They actually organized a seminar for minorities and women on franchising. One lady who had bought a Maui Wowie franchise spoke about how she agreed on the phone to purchase the franchise while she was in the hospital in labor. Maui Wowie!! Needless to say, she had the audienced glued to their seat.

In short, franchisors – get diversity. Become diverse enough to reflect your franchise candidate base and at a minimum develop a sales team that is minority savvy. Se habla espanol? Speak Chinese? Each minority group has different nuances in marketing and selling. Franchisors should look at hiring development managers out of these metropolitan melting pots if they don't have the talent in their own backyard. For the larger franchise systems, international teams could help lead efforts of domestic development teams to better tap into this domestic market. Understanding the nuances of different ethnic markets will give you a competitive advantage and help you sell much more franchises. I saw for myself that franchisors are reaching a few minorities but there is a sea out there that you are missing. After participating in your sales process, of that much I am sure. It cannot get much worse than it is now.