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Connecting to Hispanic Consumers Through Hispanic Franchisees

Although a franchise uses the name of a big company, ultimately, the store or restaurant itself is a local business.   

Franchising World February 2012 

By: Jose Torres 

Opening a new franchise or looking for new franchisee entrepreneurs who are interested in introducing or expanding a company name into a new area always has some challenges. In areas that have a large Hispanic population, the challenges are greater because the franchise owner or   company might have difficulty connecting to the Hispanic consumer. This is when it makes sense to bring in Hispanic entrepreneurs or aspiring entrepreneurs to create new businesses and projects that appeal to the local community. The local entrepreneurs have a better understanding of the demographics in the locality, are able to connect to the consumers and have knowledge about what changes might be necessary to make the franchise successful.  

The locality factor  

Although a franchise uses the name of a big company, ultimately, the store or restaurant itself is a local business. That means a successful franchise must consider the locality before having any chance of success. In some areas, this might mean looking for a Hispanic franchisee or getting Hispanic individuals involved in the local franchise to bring in customers who have a Hispanic background.  

According to data from the last U.S. Census, the Hispanic population of the United States makes up 55.4 million individuals and is the fastest growing demographic in the country, growing at five times the rate of the general population. In areas with a large Hispanic population like Dallas, Los Angeles or Miami, just to mention a few, having a Hispanic franchisee or entrepreneur involved in the business allows the company to connect with the individuals in the area.  

Every successful business must consider the consumers who live in the local area, particularly in the case of local franchise companies that must connect to the local population to avoid losing profits.    

Franchises Should Target Hispanic Consumers  

In 2011, Hispanic spending power was estimated at $1.2 trillion a year according to the U.S. Census. By the following year, Hispanic spending power is expected to represent more than 15 percent of the total spending power of the U.S. population, according to HispanTelligence. These figures do not include the buying power of undocumented immigrants.  

As this article on Hispanic consumers explains, there is a wealth of untapped consumers throughout the United States who are ready for new products and services. Many companies are unable to reach these consumers as customers because of limitations between language barriers and the ability to communicate efficiently toward these consumers.  

The U.S. Hispanic audience is not a difficult audience to reach as long as one is using the right channels and tools to perform successful Hispanic marketing. It’s a fact now that Hispanics are the second largest group in the United States with a significantly different language. When a business can efficiently reach Hispanic consumers while providing insights into their company, products or services, they are more likely to make a sale.     Connect Through Hispanic Franchisees  

As reported on  Franchise4Hispanics.    com  , Hispanic-owned businesses are the fastest growing segment of small businesses in United States. Furthermore, Hispanic-owned businesses are expected to grow more than 40 percent to 5 million by 2015. The Hispanic community is making great inroads and progress in franchising and IFA reported that Hispanic interest in franchise opportunities has increased exponentially in last five years. Some franchises had already begun to attract and recruit this growing market of aspiring franchisees such as 7-Eleven, Liberty Tax, Subway, Meineke and Stratus Building Solutions.    

Understanding the profile and the culture of the consumer is another important part of creating success in a franchise. Those franchises that bring Hispanic franchisees into their franchise system are better positioned to succeed in reaching Hispanic consumers than those who choose otherwise. Bringing a franchise into a neighborhood that has a large Hispanic population requires understanding the culture, language and people that are likely customers. Hispanics are more likely to make a purchase or conduct business with another U.S. Hispanic or Latino because there’s a cultural connection that eases the transaction. Consequently, a Hispanic franchisee has a higher likelihood of connecting to this demographic than others.  

That strong connection to the community due to having the same or a similar cultural background and language provides the franchise an opportunity to open the road for new sales. It also gives ideas to other parts of the franchise industry by working through other   franchise successes and applying those principles and promotions in similar locations. Connecting to the community is as important as understanding the neighborhood demographics and data.  

To sum up, connecting to Hispanic consumers effectively can bring sales into the revenue stream of the franchises, and while the Hispanic community will adapt to the American way, assuming that they will assimilate completely would be a mistake. Hispanics will never totally acculturate to the American way. They will always keep their core beliefs, while living the American Dream.    

For this reason, connecting to Hispanic consumers through Hispanic franchisees may be the best way to do it for a Hispanic franchisee comes from a similar cultural background and is likely to speak the same language as well. This provides a link with the community that will allow the franchisee an opportunity to reach success.  

Jose Torres is franchise advisor and managing partner of FranNet of South Florida, a leading franchise broker network affiliate. He can be reached at  jtorres@frannet.com or jtorres@buscatuFranquicia.com.