Franchising is more than just a business model—it’s a pathway to opportunity that allows individuals from all backgrounds to achieve business ownership and financial success. Franchising thrives on collaboration, teamwork, and shared success. Therefore, it follows logically that Diversity, Equity, and Inclusion (DEI) are part of its DNA.
A successful franchise system is one where everyone—franchisors, franchisees, employees, and customers—feels valued, supported, and included.
Diversity: A Key Driver of Growth
Franchise systems that embrace diversity in ownership, leadership, and employee teams outperform those that don’t. They enjoy:
- An expanded customer base – A diverse franchise team better understands the needs of a broader range of customers.
- Greater innovation – The different perspectives that result from diversity cultivate new ideas and improved business strategies.
- Customer loyalty – Customers support businesses that reflect and understand their needs.
Equity: The Foundation of Franchise Success
Franchisors must take pains to ensure that every franchisee, regardless of location, background, or tenure, has equal access to training, support, and opportunities for growth. Without equity, a franchise system risks creating resentment and disengagement among its franchisees, leading to distrust and inefficiencies.
For example, if some franchisees receive more support or marketing benefits than others, the result will be an imbalance in the system. In contrast, a fair and transparent franchisor-franchisee relationship promotes cooperation and long-term success.
Franchisees, in turn, must commit to equitable treatment of their employees. Fair pay, equal opportunities for advancement, and respect in the workplace are critical to employee retention and workplace harmony.
When employees feel valued and treated fairly, they are more engaged, motivated, and committed to providing excellent customer service.
DEI: A Historical Perspective
According to the U.S. Census Bureau, between 2007 and 2012, franchise ownership rates increased by 50% for women and historically underrepresented groups. Additionally, by 2012, more than 30% of franchises were minority-owned, compared to just 18.8% of non-franchised businesses. These statistics show that franchising has long been a way for diverse entrepreneurs to build wealth and success.
Matthew Haller, President and CEO of the International Franchise Association (IFA), highlights why diversity in franchising is essential:
“We say we are an industry that takes people from everywhere and can make them successful with the right support in a franchise system. We want to make sure that the industry and the franchisees that make up this franchising ecosystem reflect that message and make that more of a reality.”
This commitment to inclusion is evident in programs like VetFran, an initiative by the IFA that helps military veterans transition into franchise ownership. Since its founding, VetFran has helped thousands of veterans become successful franchise owners by offering financial assistance, training, and mentorship. Veterans bring leadership, discipline, and teamwork skills to franchising, making them highly successful business owners.
Inclusion: Creating a Culture of Engagement
When inclusion is a priority, franchises operate more smoothly, employees are more engaged, and customer satisfaction improves.
A strong culture of inclusion is built on the belief that everyone’s ideas and contributions matter. Franchise brands that actively seek input from franchisees, employees, and customers create a stronger, more engaged community.
For franchisors, inclusion can mean:
- Establishing franchisee advisory councils where owners can provide feedback and participate in decision-making.
- Encouraging open communication between corporate leadership and franchisees to ensure shared success.
- Hosting networking events and mentorship programs to foster relationships across different backgrounds.
For franchisees, inclusion means:
- Creating a work environment where everyone, regardless of background, has opportunities for career growth.
- Ensuring all employees feel free to contribute ideas to improve operations and customer experience.
- Implementing inclusive hiring practices to attract diverse talent that reflects the community served.
Franchising’s Commitment to DEI
The franchise industry continues to make significant progress in diversity, equity, and inclusion. A recent survey by Franchise Business Review (August 2024) highlights the growing commitment to DEI:
“Diversity, Equity, and Inclusion continues to be a priority. The franchise industry continues to make strides in diversity, equity, and inclusion (DEI). Survey results show that 85% of employees feel their company values diversity, while 88% believe their coworkers actively contribute to an inclusive environment.”
The Business Case for DEI in Franchising
Ultimately, a franchise system that is fair, inclusive, and diverse is one that is poised for long-term success.
Diversity, equity, and inclusion are not just trends – they are integral to the success and sustainability of the franchising industry. Equity ensures fairness, inclusion fosters engagement, and diversity fuels innovation.
DEI is embedded into the very DNA of franchising, strengthening its future and building a more inclusive, profitable, and sustainable path for all.
About Evan Hackel
As author, speaker and entrepreneur, Evan has been instrumental in launching more than 20 businesses and has managed a portfolio of brands with systemwide sales of more than $5 billion. He is the creator of Ingaged Leadership, is author of the book Ingaging Leadership: The Ultimate Edition and is a thought leader in the fields of leadership and success.
Evan is the CEO of Ingage Consulting, Delta Payment Systems, and an advisor to The Learning Network. Reach Evan at ehackel@ingage.net, 781-820-7609 or visit www.evanhackel.com.