Franchisors Serve Ethnic and Low-Income for Expansion

The Census Bureau expects the country’s minority population to grow from roughly a third of the population now to half by 2042. Miriam Brewer, director of diversity and education at the International Franchise Association, told the Chain Leader trade publication, “If you are planning five to 10 years ahead, you have to be thinking: Where are franchisees coming from? Where will they be located? Does my franchise development team reflect the changing demographics? Does my company focus on diversity, and is it inclusive?”

Take a look at the excerpt below about Pizza Patron. The chain's local recruitment requirement is a very good idea. It is the only franchisor that I know of which requires this.

At 84-unit Pizza Patron, these individuals are also in the stores, because the franchisor requires franchisees to hire Hispanic store managers who live in the neighborhood. “If the manager doesn’t live there, he needs to move there,” CEO Antonio Swad explains. “That is in the franchise agreement. We recruit and hire people in the community who live within walking distance of the store.”

Franchisees are not required to live in the area or be Hispanic, though Swad claims about half are. Living outside the neighborhoods they serve, however, often makes it tough for franchisees to boost sales by engaging in events outside the restaurant—a tactic that’s likely to win appreciation.

“We try to get [franchisees] to understand the work to build their business doesn’t just take place within the four walls or by being a checkbook diplomat or buying direct-mail pieces. It is community service. If you don’t have that in mind, particularly in the Hispanic community, you are not for us,” he explains.

Swad offers an example: “Say there are 200 people in a church lot. It could be a health screening prior to school starting. The church will do a lot of work getting kids ready for school, physicals and things like that, that you do not see in other communities.”

The closest Pizza Patron to the church would arrange to supply pizzas to the volunteers and help create a festive atmosphere by giving away balloons and playing games. “It’s where we do business. There is nothing too small for us,” Swad insists.

Swad and his franchisees were in a festive mood themselves in early March, having posted a 7.9 percent same-store-sales gain through February. (The sales figure cannot be checked independently because Pizza Patron is a private company.) “At a time when zero is the new plus sign, we are happy with our spot right now,” Swad says.

He attributes strong sales to the value-oriented menu. “I’ve been waiting to get the full value of the business model,” Swad explains. “We’ve always said the concept is positioned to be pretty good, with quality food but sold at an unbelievable value. But now, finding the lowest price has become a necessity.”