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Ensuring Your Franchise’s Involvement in Diverse Neighborhoods
January 2008 Franchising World
Engaging in and building relationships in the diverse communities where you own a franchise helps ensure success. By Freeman Farrow
Show Up
Reach Out/Invest Then, show up. Take the time to personally meet team coaches, parents, team members, and participants in youth and community activities. Personally take pains to ensure that uniforms are quality uniforms made to fit the individual players. As much as schedules permit, attend meetings, sporting events, special presentations or recognition ceremonies of community groups, irrespective of whether the business provides financial support to the groups. As a business owner, officially recognize positive achievements of individuals and community groups. Get involved in local chambers of commerce and neighborhood business associations. Such attention to detail and presence will cost the franchise owner more time and possibly more money, but should pay handsome dividends through customer attraction and loyalty. This may be especially important when competing businesses support other teams or events in the neighborhood or surrounding communities.
Be Even-Handed
Local Pride/Ethnic Pride
If the business model allows for this, display photographs of local heroes, famous and respected members of the local community. One may want to include nationally-renowned and respected people of various ethnic backgrounds, living and dead, making sure to include personalities that reflect the ethnic composition of surrounding neighborhoods. Ask patrons who they would like to see on a wall of fame.
Employ Local Talent
Perhaps your franchise company plans to open a store in a community in which the majority of the population is composed of one or more racial or ethnic minority groups. Perhaps the plan is to open a store in a highly-multicultural community.
Perhaps the franchise system already has a store in such a location, and wants to increase revenue in that location. One path to generating or increasing business in diverse neighborhoods is ensuring that residents view the business as an integral part of their community, that they accept and support the franchise as a vital part of that community, and that they see the success of the business as a community success. There are a number of cost-effective ways in which franchise organizations and franchisees may create positive situations for themselves and diverse communities in which they own and operate establishments, through specific franchise support of, and involvement in, the community and cultures of those neighborhoods.
Consider the racial, ethnic and other compositional aspects of the neighborhood in which the franchise operates. The system has a business which collects revenues from the neighborhood. Without effort on the franchise’s part, this may be the community’s perception of the franchise, to the exclusion of any significant understanding that the business supplies a necessary service to the community. Even if the community views the franchise as providing a needed service, the franchise system wants to ensure that community assessment of the franchise does not end there. A broader, more favorable perception of the business may be crucial to its success, and make the difference between simply surviving or thriving in diverse neighborhoods. Whether a restaurant or a supply store, community attitudes will determine whether the franchise is frequented, tolerated, supported or shunned by the community.
Similarity of ethnicity does not guarantee acceptance in a community in which a company conducts business. Differences in business owner and community member ethnicities do not necessarily foretell lack of a business’ success in that community either. Depending on the circumstances, it may be more important for a business owner who shares the ethnic background of the majority of the community to prove that he or she is invested in that community, than someone who is obviously “different.” Regardless of that franchise small-business owner’s ethnicity, it may take significant “good will” efforts on his part to have community residents perceive the store as a preferred place to do business. Heed these suggestions for becoming part of the community in diverse neighborhoods, strategies that may be utilized to the advantage of business owner and community alike.
First, show up. Franchise owners and operators must have a physical presence at the stores in the subject communities, particularly in minority communities. Although it may vary from day to day, the store owner-operator must have a physical presence at the store at all hours of operation. Appearing at the store only during daylight hours and only during typical business office hours, without obvious reasons, may be mistaken by community residents as demonstrating a business-profit-only attitude (e.g., appearing at the location only to collect revenues), a desire to have minimal involvement with the community at large, or worse an attitude reflecting irrational fear for the owner’s safety (e.g., fear of attack after dark). Such a conclusion is likely to be attributed to owner bias, prejudice, or ignorance, and may result in residents shunning the store and possibly the franchised brand. This recommendation is based in part on an assumption that the store in question is, or will be, located in a community of relative safety.
Show a presence in the neighborhood. Demonstrate that the neighborhood business is personally important. As much as reasonably possible, minimize physical barriers at the location between customers and employees. Open counter areas and easy access to speak with friendly, attentive owners, managers, and staff go a long way to instill positive community perception. Take the time to learn who repeat and regular customers are, and engage in conversation with them whenever possible. This is where a majority of the neighborhood customer base will learn what they need to know about the franchised business: does the franchise small business owner care to engage with the community while making money there, or does he not care to know his customers and their needs? Does the owner perceive neighborhood customers as valuable patrons or as proxies for profit?
Use a portion of the advertising funds to invest in community groups. Provide charitable support to local athletic teams, scouting troops (male and female), youth activities and ethnic celebrations. Better still, sponsor these activities through the business. Donate money for team equipment. Supply the team uniforms, with the business’s logo and store location on them. If the business is a restaurant franchise, periodically provide in kind donations or deeply-discounted meals to the teams or at special events.
Depending upon the organizations it supports, the franchise may gain tax benefits. Be sure to consult your tax attorney prior to making any decisions in this regard.
Prior to donating time, equipment and money to local organizations and sports teams, take time to “learn the lay of the land” and get to know community members and local leaders. Learn as much as possible about community politics, then stay out of them, except where such politics are likely to affect your business. Learn which groups compete with each other for resources, charitable donations, group members and fans (in the case of athletic teams) and supporters. As much as possible, try to remain neutral and even-handed in contributions of money, time, or other aid to such organizations. Advertise the fact that the business provides aid to each of the organizations and that it provides equal amounts of support to each. Let the community know that the franchised business supports the community without bias.
In the individual establishment, treat patrons fairly and even-handedly. Treat every patron as if he or she was your only patron, within reason. One wants a reputation for fairness in the neighborhood. With a solid record of community involvement and fairness, the franchise is less likely to develop problems with individual neighborhood residents, or to be singled out for attack in the midst of political or activist upheaval. Moreover, if any disputes do develop with neighborhood residents, community leaders will be more likely to aid in resolving those disputes quickly and fairly.
Participate in local clean-up, keep-the-neighborhood-clean or similar community pride projects. Better yet, consult with community leaders and activists and initiate community pride projects on behalf of the community, with the support of these community members.
To the extent your own beliefs and background permit, support and participate in ethnic and racial pride events and celebrations in the community.
Finally, when feasible, train and hire local talent, particularly for managerial positions. Perhaps more than other activities, the ability of neighborhood residents to work for a franchised business and to move upward in the franchise’s hierarchy demonstrate the business’ investment in the community. It also ties the community’s success to the franchise’s success, encouraging the community to invest in the business as one has invested in the community.
Truly engaging in and building positive relationships in those communities are reliable ways in which to reach that goal. Hopefully, one will find that becoming an integral part of these diverse communities, while good for business, is enriching and rewarding in itself.
Freeman Farrow is an assistant professor at DePaul University College of Law in Chicago and Of Counsel at Miller, Canfield, Paddock and Stone, PLC in Detroit. He can be reached at 312-362-6706 or ffarrow@depaul.edu.
