More women are entering franchising than ever before. In fact, between 2011 and 2017, female franchise ownership jumped 83 percent. But while many more women are purchasing franchise units (and at a rate faster than men, no less), there is still a gap between male and female franchisor ownership. The International Franchise Association’s (IFA) Educational Foundation Director of Research, Kathryn Morgan, says that while the exact number is difficult to pin down, there’s definitely a gap at the top. The IFA didn’t even see their first female chair until 2009.
Detailed below are the top six challenges for female franchisors and how to help them overcome them:
Assist Women with Franchise Funding
In order to secure the funds needed to become a franchisor, you need to prove your business model. As a woman, it’s easier to secure a loan to become a franchisee of an existing business than it is to create something new. In fact, the IFA says this is one of the reasons it’s so challenging to properly ascertain how many women are at the helms of franchises. It’s often a woman’s husband whose name on the business documentation even if he has nothing to do with the business.
Debbie Harris, President and Founder of Shapes Franchising LLC, recounts her challenges with securing approval for their franchisees. “The SBA is a phenomenal program for existing and start up franchisees, I was beyond excited to work with the SBA in finding our franchisees and incredibly viable lending source.”
The SBA funding is a critical step for any burgeoning franchisor. Without it, entrepreneurs are faced with personal funding options that are either unavailable, unattractive, or both.
Strategies for Overcoming Risk Aversion
Countless studies have shown women to be more risk avoidant than men. Reasons cited for thisdiscrepancy in risk aversion and avoidance have ranged from the biological to the sociological. It’s a trend many see apply when it comes to women considering franchising their business.
Mary Tomzack, President and Founder of Franchise Help, a franchise research and consultant group, thinks more women would become franchisors if they realized how quickly they could recoup their investment. “Sometimes all that’s needed is one sale,” she says.
Helping women understand their odds of success could help them overcome these hesitations. One study found that while women and men do not differ in their perception of possible gains or losses, women tend to be more pessimistic about the probability of high likelihood gains than men.
Helping Women See Their Value
While many women can easily see the value the world of franchising can bring to their lives, they sometimes struggle to understand what they can contribute to the business. Roberta Velichko, President and Founder of Always and Angel Homecare, knows those feelings well.
“I have a combined 15 years’ corporate experience – half in managerial sales and customer service, the other half as an executive assistant supporting high level executives. But then I was a stay-at-home mom for 17 years. A lot of women would define themselves as a mother first, but they don’t realize how much value there is in that. What I found was my skills were more transferrable than I realized. Research and problem solving; time management; organization; teaching; supervising– those are invaluable in any business setting, especially if you’re starting a franchise.”
Helping women understand how their skills translate and the salience of their business could help them feel more confident in taking the leap into franchising.
Nailing Brand Basics
Both Velichko and Harris emphasize the importance of having a strong brand, processes, and onboarding materials. “Your business needs to be systematic; it needs to be scalable. At the end of the day you’re taking your business and putting it in someone else’s hands. You need to have trust, but if your branding and materials are strong, that trust comes easier,” says Harris.
“At this point our business practices are very streamlined and fine-tuned,” says Velichko. “The goal is to make it something easy to replicate while staying very true to who we are. Of course, that continues to evolve all the time, but with the right foundation those shifts will be easier to roll out.”
The most important thing for potential franchisees of your business to have? “Vision,” Harris says. “We’re always going to evolve and be looking to make changes, just as any business does. But if everyone understands who we are fundamentally, those changes are easier to accept.”
Understanding a brand’s vision is important, but the true litmus test for potential franchisees should come down to passion. “There have been similar franchise concepts to Shapes that started out being very successful. Then they grew so big and started to struggle because they franchised to the wrong people,” says Harris.
“I don’t need everybody,” adds Velichko. For her, it’s critical that the franchisees she brings on board have a passion for the business. “Your fab 5 are the first 5 franchisees you sign on. They’re going to be your best advertisement – you have to make sure they’re a good initial franchisee choice.”
Ellen Latham, founder of Orangetheory Fitness, has compared building the business to raising children.
“If you raise your kids really well, with morals and the understanding of things you’re supposed to do, you don’t have to micromanage their lives,” she says. “I think that’s how we’re supposed to do this.”
Getting Help: Vendors and Mentors
Starting a new franchise can be overwhelming. Velichko recommends seeking out the experts and letting them guide you. “There’s a lot of fantastic advice from great vendors out there. For us, iFranchise was our consultant of choice, but it’s about finding that right fit.”
Accounting is another area where many new franchisors need guidance. OnePoint Franchise Accounting specializes in serving franchisors and franchisees to determine the scope of services that will best serve their business. Getting help from mentors and vendors who truly understand the franchise process is invaluable to any emerging franchise.
Overcoming these six common hurdles can help empower any female business owner to take the leap into franchising. Women are already a growing workforce in the franchise world – owning more of the franchise concepts is a natural evolution for this demographic.