Over the years, the path to creating wealth is often tedious and never straightforward, especially when there is no one to act as a guide. This is the case for many Americans. However, it only takes one right step(like strategic investing) to kickstart the vehicle that will drive one to success. Taking history into account, home and business ownership have stood out as two primary methods for accumulating and building generational wealth.
Moreover, business ownership or entrepreneurship is one of the proven ways of living the American Dream. By being dedicated, hardworking and smart, not to leave patience out of the mix, anyone can live a prosperous life. However, for a majority of African Americans, this American Dream still feels like a fairytale. Recent statistics show that less than 50% of African Americans own a home, even though they make up approximately 14% of the U.S. population. As if it wasn’t bad enough, only 2.4% of them are business owners in the U.S. market.
Furthermore, a study in 2021 was done by comparing an average white household and an average African American household. The results showed that the average white household has nearly ten times more than the average African American household($250,400 to $27,100 respectively). This shows that the wealth gap in America will keep increasing. However, there might just be some light at the end of the tunnel, with some people who have stepped in to make a change.
Let’s start with Omar Simmons, President of Exaltare Capital Management. He found franchising to be the cornerstone of his life's journey. Starting from modest roots in a working-class family in inner-city Boston, Omar's dedication, talent, and hunger for knowledge propelled him to Princeton University, where he balanced track athletics with his undergraduate studies. His path continued to Harvard Business School and a subsequent career in private equity.
However, after years in finance, Omar's desire to operate a business firsthand began to get the better half of him. Taking a leap of faith, he and his wife Raynya ventured into acquiring a franchise business. Starting with 15 Planet Fitness units, Omar and his team expanded the venture to over 100 locations before selling in late 2021. Omar credits a significant portion of his success in growing the franchise to the model's distinct advantages—being able to own a business by yourself but also having a team of people who share the same dream and goals as you.
Despite the fact that he had no prior experience in franchising, Omar was determined, and he learnt from other franchisees and also his colleagues who are into franchising. Due to their successful journey, Omar and Raynya got involved with the International Franchise Association (IFA).
IFA stands as the world's foremost membership body for franchisors, franchisees, and franchise suppliers. Representing over 1,200 brands, IFA's membership spearheaded the creation of 8.7 million jobs, generating $8.58 billion in economic output and contributing 3% to the U.S.
Gross Domestic Product (GDP) through franchising. With such a substantial presence, franchising emerges as a potential catalyst in bridging the wealth divide among marginalized communities. Remarkably, 26% of franchise businesses are owned by individuals of color, in contrast to the 17% ownership rate in non-franchised or conventional businesses. Notably, black-owned franchises, on average, generate 2.2 times more revenue than black-owned independent businesses.
While the IFA has made remarkable strides in recent years, the IFA’s Diversity Institute acknowledges a significant information breach when it comes to reaching out to the African American community regarding franchise business ownership and opportunities for marginalized groups. To bridge this gap, the Diversity Institute conducts various programs aimed at sharing valuable information and resources with communities of color.
Recognizing the need to expand these initiatives, the IFA is introducing the Franchise Ascension Initiative in 2024, inspired by success stories like Omar and Raynya's. This initiative will launch a business accelerator program designed to identify, train, and support talented individuals of color on their journey into franchising.
Participants will benefit from top-notch franchise education, mentorship from influential business figures, and access to extensive franchise development networks, ensuring they feel supported and included in the franchising community.
Omar commented, “ We understand that talent is evenly spread across members of the community, but the opportunities to nurture these talents, does not. We need to make sure that we do not discriminate against anyone because of their color, zip code, background, or appearance.”
The Franchise Ascension Initiative is a primary focus for the association, aiming to broaden opportunities for people from diverse backgrounds. Earsa Jackson, Chair of the IFA Diversity Institute, highlights that “when people think of franchise businesses, they often think of well-known brands like Dunkin’ Donuts or McDonald’s.
However, franchising isn’t limited to those few big names in the quick-service restaurant (QSR) industry. It covers over 300 industries, ranging from household services to pet care and janitorial cleaning.” Companies such as Self Esteem Brands, which operates boutique fitness concepts like Basecamp Fitness and Waxing the City, as well as Neighborly, a franchisor of various home services brands like Mr. Rooter and Glass Doctor, offer lower-cost investments that have the potential to grow into multimillion-dollar enterprises.
Franchising is not just a door to a successful life but a gateway to meeting like-minded individuals and fostering groundbreaking, innovative ideas. It is a way for individuals from marginalized communities to kickstart their life dreams and reach their full potential. Franchising is not just a way, but a proven path to wealth generation and business growth, offering opportunities for ambitious individuals to thrive. To learn more about IFA and the Franchise Ascension Initiative, visit www.franchise.org.
Disclaimer: This article is informative and not for promotional purposes. Moreover, the content belongs to the owner and there are no affiliations or marketing motives behind it.
