The International Franchise Association projects that by the end of 2021, there will be more than 780,000 franchises in the U.S.
However, the latest government numbers show only around 31% of those franchise owners are people of color.
"When we think about entrepreneurs of color, in particular, they have all of the traditional barriers that entrepreneurs have, but also an extra barrier that comes with things related to lack of access in the past," said Angela Randolph, an assistant professor of entrepreneurship at Babson College.
Luckily, several new programs are trying to reduce barriers and get more people of color and women into franchise opportunities.
Darius Billings is trying to break down barriers through StAART — the Strategic African American Retail Track program.
"Really, the number one consumer for sneakers are African Americans, but then, when you look at the ownership side — especially on the retail side — there's not that many African Americans that that owns stores," Billings said.
StAART's goal is to get more Black people into franchises through retailer The Athlete's Foot. Billings says the height of the Black Lives Matter protests one year ago sparked the idea.
People chosen for the program will receive information, resources and a mentorship network to help each franchise maintain success.
Randolph worries that a lack of access to funding may still hold Black entrepreneurs back.
"Even with the most highly educated entrepreneurs, if they don't have access to the funding, you get all of this knowledge, this help, this mentorship and this expertise and nothing to do with it," Randolph said.
"When it comes to the capital, yeah, at the end of the day, the relationship is between the potential franchisee and the financial institution," Billings said. "But I just tried to make that pathway a little easier, let them let the financial institutions know who we are and what we're trying to do."
Randolph says franchises can be a good opportunity when they're well established and have a strong business model.
However, challenges remain with certain company rules for franchises and the cost of buying into them. But Billings says the trade-off is potentially building generational wealth.
Applicants can apply for the StAART program by clicking here.
