Detroit News | Scrivano, Haller: Detroit is ripe for the franchise business model

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David Scrivano and Matt Haller
The Detroit News
As we all know and have experienced, Detroit is a thriving city on the move and a great place to live, work and play. For the first time in nearly 70 years, the city’s population is rising. Its economy is growing, and opportunities are increasing.

And amid all the progress and promise, there remains even more unrealized potential. To further capitalize on this exciting growth and vibrancy, policymakers would be wise to focus on policy specifics helpful to the franchise business model, which is a key driver for growth and opportunity for all, and particularly Black entrepreneurs.

Dating all the way back to Benjamin Franklin’s printing press, franchising is one of America’s oldest and most successful business models. It involves a franchisor, who establishes a brand trademark or trade name, and a franchisee, who operates under the franchisor’s name and system for an initial fee or royalty.

The model allows people with a dream, desire and drive to own and operate a business while benefitting from existing infrastructure with a proven record and recognizable brand.

Little Caesars planted roots in Detroit, and our branches are flourishing all over the world. In 1962, our first franchise opened in Warren — a decision that paved the way for Little Caesars to become the fastest-growing pizza chain in the U.S. and an internationally known brand.

We’re one of the more than 23,000 local franchises providing more than a quarter-million jobs across Michigan. Even in a challenging climate marked by lingering inflation and high input costs, franchising is expected to grow by 4.1% in 2024, outpacing the broader economy, which is expected to grow closer to 2%.

As a majority-Black city, Detroit is especially ripe for the franchise model. The city’s low costs have already made it a major attraction for those seeking to start a new business. According to data from Oxford Economics, Black-owned franchise businesses earn 2.2 times more in sales compared to non-franchise businesses. Franchising can help close the gap between the overall Black population (14%) and business owners (only 2.3%) according to Brookings.

It’s no secret that Black entrepreneurs were hit harder than other demographics by COVID-19. According to the Federal Reserve’s Small Business Credit Survey, a whopping 92% of Black business owners experienced financial hardship during the pandemic, compared to 79% of their White counterparts.

Detroit was recently visited as a site on the International Franchise Association’s “Open For Opportunity” Roadshow to showcase the city’s ongoing success and potential — and the role that franchising has to play in that.

The International Franchise Association isn’t the only visitor from Washington, D.C., making their way to Detroit. Michigan is in the national spotlight, and its voters have the power to force candidates seeking their support to move past the sound bites and talking points and into the policy substance.

The franchise community, like business owners everywhere, is far less focused on the letter behind a candidate’s name and more interested in their economic vision. Detroit is on a strong path forward, and support for franchising will help ensure it continues in that direction.

David Scrivano is CEO of Little Caesars. Matt Haller is president and CEO of the International Franchise Association.

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