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Franchising: A Minority Option

While franchising can be a great way for anyone to succeed in the world of business, thanks to the wide range of options available, the increased popularity of the model among people from ethnic minority groups has caused a surge in franchisers catering specifically for these areas.

As the growth of large supermarkets and restaurant chains continues to put increasing pressure on small businesses, many entrepreneurs are becoming concerned that the uptake of business in certain industry areas has slowed.

However, many ethnic minorities, who traditionally dominate the small and medium-sized end of these industries in the UK and US, are continuing to fuel the franchise market and embracing the chance to improve their own business through franchising.Ethnic business professionals

And as the number of people from ethnic minorities entering into franchising continues to grow, many franchisers are now actively seeking out such groups, with both sides embracing a strong work ethic and increased support from wider families or community networks as key traits needed to start and maintain a successful franchising career.

Interesting Facts about Minorities and Franchising
  • In the 2011 UK cenus, over 10% of people belonged to ethnic groups.
  • 8.3% of the self-employed population are Asian or Asian British, of which, the largest self-employed group are Pakistani (11%).
  • 8.4% of franchisees belong to an ethnic group.
  • In the last two years, 10% of new franchisees are Indian, 3% Asian Other, 1% Black Afro/Caribbean .
  • The franchising industry reached a turnover of £13.4 billion in 2011.
  • There are 929 franchised businesses operating within the UK.
  • 364,000 people are employed in the franchising sector.

Source: NatWest BFA Franchise Survey 2006, 2012

Andy Cooke, franchise sales manager at Domino's Pizza, explained to "Most of our franchisees from ethnic minority backgrounds aspire to own multi-unit operations. These franchisees tend to involve their wider family networks in the investment, set up and management of their own Domino's Pizza businesses."

Formerly, it was often discrimination in the workplace which gave many enterprising people from certain ethnic groups no choice but to become their own boss, but the businesses started by older family members are increasingly being left behind by younger generations, opening the door for new opportunities such as franchising.

And while financing can be a problem for any business, many banks are now waking up to the growing number of ethnic minorities becoming franchisees and are offering specialist services to help get business ventures off the ground. For example, HSBC has opened a specialised South Asian Banking division which offers help and support to ethnic minorities seeking the funds to start their own business.

But as the domination of large supermarkets continues, traditional industries such as local grocery stores, often run by Asian families in the UK, are declining. Opening longer hours, which was often a selling point for ethnic businesses, as well as cutting prices has meant the number of these stores has been dropping considerably over recent years and the trend is continuing.

Nevertheless, franchising is often seen as the ideal solution for entrepreneurs, who can capitalise on the support and backup of a large organisation which can still compete with the supermarkets, meaning people from all ethnic groups can adapt and change, reducing the risk of failure.

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