25 years of blacks in franchising - 1969-1994 chronology of significant business developments - Cover Story

Black Enterprise, Sept, 1994 by Cassandra Hayes, Rhonda Reynolds

"HAVE IT YOUR WAY," BURGER KING'S CATCHY credo, evolved from the 1969 findings of an African-American Burger King owner whose finicky customers insisted on finetuning their Whoppers. So Brady Keys, a fast-food titan who owned several Burger King and Kentucky Fried Chicken outlets, began filling custom-made fast-food orders as a standard in his shops. Soon, the Burger King home office adopted that concept as their advertising slogan. It turned out to be the fast-food chain's last great advertising campaign.

African-Americans, like Keys, have been making advances and contributions to the franchise arena for decades. In 1970, BLACK ENTERPRISE's premiere issue featured a report on blacks in franchising. In 1987, after nearly two decades of coverage, BE began investigating and listing the number of black-owned outlets among the nation's franchise companies.

Back then minorities made up barely 2.5% of the franchise industry. They now represent approximately 5%.

But this has been a long sojourn, and there are still difficulties. Civil rights advocates and business development groups must consistently lobby to elevate minority participation in this $803 billion sector. By demanding the black community's "fair share" and using "moral covenants," the National Association for the Advancement of Colored People and Operation PUSH serve as catalysts and caretakers to keep increasing the black presence within every rank of the franchise industry.

African-American franchising leaders have had a strong grip on the BE 100s. The megafranchises include: Brady Keys' All-Pro Enterprises and Lonear Heard's seven McDonald's restaurants. Most recently climbing onto the BE INDUSTRIAL/SERVICE 100: Larry Lundy's 31 Pizza Huts, ranked No. 69 with $23.3 million, and Valerie Daniels-Carter's 34 Burger Kings, holding the No. 70 slot with $23 million.

Still, some franchisors have been accused of perpetuating deliberate, unlawful and systematic exclusion and discrimination against blacks, primarily by restricting minority owners to low-income or depressed neighborhoods.

In response, some franchise companies have set up in-house programs to seek and keep minority franchisees and staffers.

Despite various institutional obstacles, blacks have taken significant steps in this lucrative but cliquish and often expensive arena.

1969

Brady Keys Jr., former pro-football halfback for various NFL teams including the Pittsburgh Steelers, is one of the first franchisees in the country to own two different fast-food franchises. His All-Pro Enterprises Inc. is the parent company of several Burger King and Kentucky Fried Chicken outlets. In addition, Keys had already started a family business in 1967, All-Pro Fried Chicken.

1975

Wally Amos forms the Famous Amos Retail Development Corp., franchisor of retail cookie stores. In 1985, the company was sold to a private group of investors after experiencing financial troubles that almost sent the Van Nuys, Calif., company into bankruptcy.

1981

NAACP's "Operation Fair Share" program is created to boost minority job opportunities and entrepreneurship. McDonald's Corp., Hardee's Food System Inc. and Wendy's International all sign the accord to increase the number of black franchisees and the amount of money the companies spend with minority vendors and suppliers by 1985.

1986

In a multimillion dollar deal, Arnold Whitmore and five other investors purchase 25 Church's Chicken outlets, making them the largest minority operators of fast-food franchises in the nation.

1987

The BE FRANCHISE 50 list is published for the first time. The annual listing ranks franchise companies with the most black-owned franchise outlets.

Lonear Heard, president of James T. Heard Management Corp., opens her seventh Los Angeles-area McDonald's restaurant.

1988

Hank Aaron, legendary home run king, sings a pact with Arby's to develop and operate 15 restaurants in the Milwaukee area.

The Commerce Department's Minority Business Development Agency stops tracking the number of minorities in franchising.

Herman Cain, president of Godfather's Pizza, signs a $50 million agreement to purchase the 586-unit chain from the Pillsbury Co. This marks the first leveraged buyout of a major fast-food company by a black executive.

1989

Matt Brown's Brooklyn-based Goodyear-Big Apple Tire and Auto Service Center becomes Goodyear Tire & Rubber Co.'s. No. 1 franchise in the Mid-Atlantic region, selling more tires than any other single franchise store.

Black franchisees file a $500 million classaction suit against Burger King, charging the firm with confining a majority of black owners to high-cost, high-crime areas.

1989

The National Association of Negro Business and Professional Women's Club in Washington, D.C., becomes the first organization to buy its own franchise, an American Speedy Printing Center.

1990

Two black-owned franchise companies make the BE Franchise 50--Accent Hair Salons Inc. of Ohio (No. 31) and Fatburger Corp. of Calif. (No. 46). Accent, a nine-year-old firm, has a 100% African-American franchisee rate.