A Franchise Of Her Own

Entrepreneur, June, 2000 by Ellen Paris

Meet a few exceptions to the rule that women just don't do franchising -- and why don't they, anyway?

NAME RECOGNITION means a lot these days, and franchising provides entrepreneurs with exactly that--a recognizable brand name. In 1998, according to the International Franchise Association (IFA), nearly half of U.S. retail sales came from franchises. And with thousands of franchisors based in the United States alone, opportunities abound for those seeking this route to entrepreneurship. From homebased home-improvement services and fast-food restaurants to candy design shops, it seems there's a business out there to appeal to just about anyone, whether you're a man or a woman.

So it comes as a surprise that, with all these franchising opportunities ready for the taking, the ranks of women involved in franchising have declined in recent years. A recent study conducted for the SBA by Women in Franchising (WIF), a consulting firm in Chicago that works with women franchisees and franchisors, found that in 1995 (the most recent year for which figures are available), female ownership of franchises totaled 8 percent, down from 11 percent in 1990. By contrast, during those same years, the proportion of solely male-owned franchises increased to 62 percent from 60 percent.

The figures are puzzling--especially when you consider the fact that women are starting businesses at twice the rate of men in the United States. But Susan P. Kezios, president of WIF, points out several reasons for the apparent male/female discrepancy: "Opening a franchise often [requires] higher initial capital requirements than starting a business from scratch," she says. And Kezios claims that gender discrimination still exists in the franchise industry: "Franchising is still basically an old boys network, and sometimes, when women want to become franchisees, a franchisor will say, 'We want your husband in on it.'"

Despite such obvious roadblocks, Kezios insists there's hope on the horizon. "In the past year and a half, for the first time, the International Franchise Association has made a big push to help women become [more] involved in franchising."

Last year, in fact, IFA hosted several franchise trade delegations and regional education conferences targeting women. Debbie A. Smith, IFA's vice president of public affairs and emerging markets, says the industry as a whole is beginning to accept women more and more. Case in point: The IFA's first woman chairperson took office this year.

One of the country's largest franchisors, Churchs Chicken, boasts a woman president. Hala Moddelmog, president since 1996, says Churchs recognized the gap forming between men and women franchisees several years ago and decided to do something about it. "We thought we should get the word out to women that franchising is a great way to have your own business' she says. "You get systems that are in place, training and a trademark, and yet there is still room for entrepreneurship." Churchs also recently launched its own professional mentoring program directed especially at women. According to Moddelmog, who points out that approximately 19 percent of Churchs franchisees are women, "We're recruiting women franchisees as mentors to go to various events and talk to women about franchising."

Moddelmog acknowledges that financing is one of the biggest obstacles for women franchisees. "Hopefully, times are changing for women getting financing," she says. "There are women out there who need angel investors, and we'd like to hook them up with other women franchisees who've already created their wealth and want to diversify for a small piece of the action in return."

But the idea goes far beyond just bringing more women into franchising--the fervent hope is that all the financing and franchisor effort will incite a new trend that builds on itself. Says Kezios, "More women franchisors will bring in more women franchise entrepreneurs."

As for Churchs, Moddelmog says, "It doesn't hurt having a woman as president."

Ellen Paris is Entrepreneur's "Management" columnist.

BREAKING BARRIERS.

Men, men, men ... sometimes it seems like they're the only ones in franchising. Well, no more--here are some franchising heroines to get your entrepreneurial blood pumping:

MOLLIE GARDEN, 28

COMPANY NAME AND DESCRIPTION: Plato's Closet is a retail store selling "gently used" clothes, accessories and the like, including CDs and jewelry, for teens and young adults. Garden's store is located in St. Cloud, Minnesota.

STARTING POINT: Started plans in 1999 for a July 2000 opening; total estimated first-year costs were approximately $145,000 (including a $20,000 franchise fee).

2000 SALES PROJECTIONS: $182,500

SHOP AROUND: It wasn't long before Garden, a lifelong shopaholic and mother of two children under the age of 3, had become a devotee of children's resale shops--especially the franchise Once Upon A Child. "I always shop them whenever I see one," she says. "I thought it would be great to open one myself." But Garden hesitated, and someone else beat her to it in her town. Undeterred, she contacted Grow Biz International, franchisor of Once Upon A Child, to discuss other franchising opportunities. Lucky for her, the company had just launched another resale retailing concept called Plato's Closet. "I liked what I heard and saw, and decided to go for it," she says. "And since I was familiar with Once Upon A Child, I felt comfortable with the franchisor."