FRANCHISING: Top 25 Franchises for Hispanics

Few would disagree that franchising has historically been an exceptionally successful model for gaining wealth and security. Even though there are attendant costs, following someone else’s time-proven system can be infinitely better for most people than starting a business from scratch.

Although there are no firm statistics on the percentage of franchised outlets currently owned by Hispanics, the National Minority Franchising Initiative (NMFI) estimates it is no more than 6 percent. Considering that Hispanics comprise approximately 15 percent of the population, this is an unacceptable imbalance—and one that progressive and business-oriented franchisors are trying to change.

While some franchisors may seek to correct this imbalance out of a sense of fairness, a growing number also see tangible economic benefit to increasing their percentage of Hispanic-owned outlets.

By some estimates, the spending power of Hispanics is nearing $1 trillion. Accordingly, it is in the best interests of franchisors as well as Hispanics, as a group, to ensure that they capture their share of that money through businesses within their own communities. Franchising can provide that opportunity.

Given that there are over 3,000 active North American franchisors trying to recruit franchisees, it can be overwhelming to select the franchise system that best fits an individual’s strengths and weaknesses. Some franchisors represent strong brands. Others are terrible, both in terms of their underlying system and their support of franchisees.

How do you find the gems amongst the rubble? A logical starting point is to consider franchisors that aggressively court Latinos, as well as those that support them once they become part of the system.

In an attempt to find out which franchisors are interested in recruiting Hispanics in particular, the NMFI recently surveyed franchisors. The questionnaire was designed to determine both the current number of Hispanic franchisees within the system and the proportion of Hispanic executives in the franchisor’s senior management.

Based upon the results of the survey as well as knowledge of various franchise systems, NMFI selected 25 franchisors that represent excellent prospects. Several have modest costs of entry, some have products and/or services that are especially recession-proof, and some are simply strong, proven franchise systems that provide excellent ongoing support.

Keep in mind that this is most certainly not a definitive list, only a preliminary screen to get you started. There are numerous variables that must be seriously evaluated before committing to a franchise. These include historical performance, brand identification, market dynamics, franchisee satisfation, the level of initial training and ongoing support, financial stability, and various other key areas that must be explored.

7-Eleven
[Industry Type] Retail Food
[Total Units] 35,603
[Projected New Units—Next 12 Months] 200
[Cash Investment] Varies by Store
[Total Investment] Varies
[Average Total Investment] Varies by Store
[Ongoing Royalty] Gross Profit Split
[Employees Needed] 5 full-time, 5 part-time
[Who they are] 7-Eleven is the world’s largest convenience retail chain. Based in Dallas, the company operates, franchises or licenses more than 7,600 stores in North America. Keeping in mind the importance of neighborhood focus, the company assists and empowers franchisees to make decisions based on what their store’s customers want and need.

Athlete’s Foot, The
[IT] Sports Retail and Footwear
[TU] 569
[PNU] 65
[CI] $85K
[TI] $200-$525K
[ATI] 275
[OR] 5%
[EN] 2 full-time, 6 part-time
[Who they are] The Athlete’s Foot, with more than 600 stores in 45 countries, is the leading international franchisor of namebrand athletic footwear. Franchisees will benefit from headquarters’ support, including training, advertising, real estate, store design and product selection.

Bonus Building Care
[IT] Maintenance Services
[TU] 2,273
[PNU] 100
[CI] Varies
[TI] $8.8-$14.7K
[ATI] 14
[OR] 10%
[EN] Varies
[Who they are] Commercial cleaning offers more stability than many businesses, and Bonus is considered a leader in the field. Franchisees get support and training not only in the cleaning aspects of the business, but in areas such as sales, billing, accounting, customer service, insurance, financing, clerical and procedural assistance as well as opportunities for expansion.

Captain D’s
[IT] Fast Food Restaurants
[TU] 551
[PNU] 5
[CI] $300K
[TI] $1.3MM
[ATI] 1,300
[OR] 4.5%
[EN] 3-5 full-time, 20 part-time
[Who they are] Captain D’s restaurants offer high-quality seafood in a fast food environment. Launched in 1969, Captain D’s has grown to almost 600 restaurants in 23 states. While the system is currently over 50 percent corporate-owned, development in new markets nationwide is happening at an increasing pace by franchisees. The company has a Veterans and Minority Franchise Program that allows franchisees to defer half of the licensing fee until the second anniversary of the restaurant’s opening.

Carl’s Jr.
[IT] Fast Food Restaurants
[TU] 1,152
[CI] $300K
[TI] $1.1MM
[ATI] 974
[OR] 4%
[EN] 33
[Who they are] Over the last 60 years Carl’s Jr. has built a reputation as one of America’s premier chains for charbroiled burgers. Today, there are more than 1,100 Carl’s Jr. restaurants worldwide, with more than 300 dual-branded Carl’s Jr./Green Burrito restaurants. Extensive assistance is available to franchisees for site selection, restaurant design, construction and equipment ordering.

Choice Hotels International
[IT] Lodging
[TU] 5,771
[CI] 20-30% Costs
[TI] $2.3-$12.6M
[ATI] 7,450
[OR] 2.75-5.1%
[EN] Varies
[Who they are] Choice Hotels is the leading hotel franchisor with over 65 years experience. Brands include Comfort Inn, Comfort Suites, Quality, Sleep Inn, Clarion, MainStay Suites, Suburban Extended Stay, Econo Lodge, Rodeway Inn and the upscale, all-suites Cambria Suites.

Coverall Health-Based Cleaning System
[IT] Maintenance Services
[TU] 9,603
[PNU] 1,736
[CI] $2,000-$27,200
[TI] $10,612-$37,345
[ATI] 24
[OR] 5%
[EN] 1-2 full-time, 2-3 part-time
[Who they are] Coverall offers a different take on the office-cleaning service, focussing on cleaning at the “unseen” level by removing germs and pathogens that lead to employee illness. The company offers ongoing training of franchisees and their teams to ensure the most current knowledge of cleaning techniques.

Denny’s
[IT] Restaurants (Sit-Down)
[TU] 1,541
[PNU] 37
[CI] $350-$400K
[TI] $1M-$2.6M
[ATI] 1,900
[OR] 4%
[Who they are] For over 50 years, Denny’s has been the trusted leader in family dining with a brand awareness of almost 100 percent. Denny’s serves more than 26 million customers a month in 1500+ restaurants worldwide, which are open 24 hours a day.

Famous Famiglia
[IT] Fast Food Restaurants
[TU] 89
[PNU] 32
[CI] $200K
[TI] $250-$700K
[ATI] 375
[OR] 6%
[EN] 4 full-time, 8 part-time
[Who they are] Famous Famiglia is an award-winning national pizza brand with leading sales in the pizza segment. Operating nationwide, it has earned several industry awards for product quality and customer service. Expansion plans include high-profile markets and locations such as airports, shopping plazas, universities, and more.