December 19, 2014

Why Aren’t More Women Interested in Franchise Ownership?

I’ve never really understood why men dominate general inquires about opportunities in franchise ownership.

Well, maybe I understand part of the reason: It’s the numbers.

According to a report by Catalyst, only 13.5 percent of Executive Officer positions at Fortune 500 companies were held by women, and less than one-fifth of companies have three or more women Executive Officers, while almost one-third of companies have none. (From 2009 Catalyst Census: Fortune 500 Women Executive Officers and Top Earners.) Read the Catalyst Research Report.

I’ll admit that I’m not a data-centric guy; I rely on my intuition more than raw data when it comes to making decisions. (It’s an issue that my wife and I have debated about rather energetically for almost 20 years now.)

I also use personal observations when making determinations and decisions about things. For instance, whenever I do presentations on franchise ownership for Execunet (an exclusive networking organization for executives and senior-level managers with salaries above $100,000), the percentage of women that are in attendance is always significantly more than 13.5 percent.

When it comes to actual franchise ownership by women, it’s around 25 percent, according to a research report compiled by Pricewaterhouse Coopers and the IFA, Franchised Business Ownership: By Minority and Gender Groups (PDF).

In the 10 years that I’ve counseled and advised prospective franchise owners, however, only about 20 percent of the inquiries that I receive come from women. I really wish the percentage was higher.

I have a very selfish reason for wanting to have a larger percentage of women to work with; they make my job easier. I think that it has to do with their egos.

Most of the women I’ve worked with don’t let their egos get in the way of their goals (like men sometimes do). I’ve found that once they’ve gotten comfortable with me and my consulting style and techniques, they follow my directions–they just do it. They share the facts that they’ve gathered in my weekly follow-up calls, and then I suggest the next steps they should be taking. This goes on for a few weeks, until it’s decision time.

I’m not saying that the women that I’ve worked with are following my directions in some type of weird, submissive way. What I am saying is that the women who’ve worked with me get down to business. They focus on getting the facts so they can get to the finish line quickly.

In his “The Franchising Handbook: The Complete Guide to Choosing a Franchise,” Ian Murray says a couple of important things about women as franchise owners:

  • Women are good at organizing, at coordinating activities and people efficiently. This means women franchisees will be naturally inclined to organize and coordinate their franchise opportunity more productively and profitably.
  • Women are good at prioritizing, at deciding which activities are more important than others. This particular skill works well in the franchising industry, when problems arise concerning planning, staffing, financing and people management.

So, not only do women really excel when it comes to franchise due diligence, they also have the skills needed to succeed as franchise owners.

In a Small Business Trends post about women starting businesses, Rieva Lesonsky wrote, “According to The Guardian Life Index, a survey of American small business owners, women are most likely to start businesses because they’re unhappy with corporate life, and future job growth will be created primarily by women-owned small businesses.”

It sure seems like all the necessary ingredients are there for more women to start at least inquiring about franchise ownership. I wonder what it’s going to take for more of them to do so.

Do you have any ideas on how to make this happen?

16 Comments ▼

Joel Libava - Franchise Expert


Joel Libava Joel Libava is the Franchise Expert for Small Business Trends. Joel, The Franchise King®, equips today’s prospective franchise owners with time-tested, proven techniques designed to increase odds of success. He does this through one-on-one coaching, and gobs of useful content that can be found on places like Small Business Trends, SBA.Gov, and his award-winning franchise blog, The Franchise King Blog . He’s been featured in Entrepreneur® magazine, and is frequently called upon by national media outlets and publications for his no-spin insights into the world of franchising.

16 Reactions

  1. Loved the post and the perspectives. Couple of thoughts here:
    1) I think many women do not strike out on their own because of the egos you mentioned, or rather lack of. Many women want to have power to be able to make things happen, but they don’t necessarily need to be the big cheese.
    2) I could be wrong here, but I wonder if it has something to do with franchises specifically. As I’m sure you’re aware more than anyone there are pros and cons of going with a franchise, but if a woman is going to take the leap and strike out on her own, she may shy away from a franchise as she has to raise the start up cost to buy in, share her profits for all eternity, and then follow someone else’s rules. If the very reason she broke away from corporate life was to get away from the rules and red tape of corporate life, she doesn’t want to go back into a similar situation with a franchise.

  2. I’m with Nicole on point #2. I’ve not heard enough positive remarks about franchise ownership to want to get into it. I’d rather create my own business with my own rules and do it my way.

  3. Hi Ladies,

    I respectfully disagree with #2. The women that do reach out to the franchise folks know ahead of time that they’ll be following rules; they also know that it’s totally different than having a rule-driven, corporate job.

    Also, the statement about having to “share her profits for all eternity,” is kind of negative; the franchisor invented the franchise business, and has provided a blueprint for folks to ramp up fast, and reap the rewards of having a business in a box in which to go into business in the first place. It’s only fair that they get rewarded. After all, their not making their profits from the up-front franchise fee, anyway. (In general)

    That’s why one of the questions in my franchise questionnaire deals with royalties. I ask folks if they are comfortable with paying them to begin with. It’s important.

    For the right person, at the right time in their life, who understands that they won’t be a true entrepreneur, but they will at least be a small business owner, they should look into the business model of franchising. It could just work.

    The Franchise King

  4. Joel,

    I don’t disagree with you that there are certain benefits to franchises – some people don’t want to make all the decisions and enjoy the backing, and the fact that you’re starting out with a name has it’s advantages; that is the trade for the profits. My comment was merely a potential explanation to why women don’t choose the franchise route.

  5. I can apprecial Nicole’s responses and answer as to why some women choose not to go the franchise route. While it may be a great decision for some women, the idea, at least for me only sounds good in part. I like the idea of having a blueprint, because it does take some of the headache out of the equation. But on the other hand, it’s those headaches that although hard to swallow, are what make us thrive as business women, and building something from scratch has its own set of warm and fuzzies.

  6. Hey Joel,
    You asked in your blog, “I wonder what it

  7. It was certainly an interesting article. We

  8. Hi Katrina,

    Thank you so much for your suggestion that I, (and others)keep educating women about the business model of franchising.

    I hope that you won’t be disappointed here;

    I’m not going to try to “sell” you on franchising. The thing about franchising is this;

    It’s not for most people. You see, I don’t drink my industry’s Kool-Aid. Becoming a franchise owner is a big decision. And it’s risky. You have to be right for it. If you’re too entrepreneurial, or too controlling, it’s not going to be a positive thing for you. You’ll probably lose money, because you’ll want out. So, you’ll sell it for a loss, or just close it down.

    I always have folks that are even remotely interested in the idea of franchise ownership go here, first;

    http://www.takethefranchisequiz.com

    It’s a free quiz I designed for folks that are considering franchise ownership.

    And, I’m always open to talking.

    The Franchise King

  9. In my experience, a high majority of franchise sales people — those selling franchises for the franchisor — are men. Having created franchising marketing campaigns, the target audience profiles focus on those with prior experience and appropriate capital. Even with mom and pop franchisees, it’s typically the men driving the business deals.

  10. As a female franchise attorney, I feel I must comment on this stream of comments. I think franchising is an excellent way for a woman leaving corporate America to start her own business. In my experience, just because someone has been an employee of a (presumably) large corporation, does not mean she can start a new business. What franchising does is to provide the guidance to a (hopefully) successful business. With that said, it is imperative that any prospective franchisee do her due diligence (homework) in carefully researching the franchise opportunity, speaking with franchisees in the franchise system (and even those who have left the system), spending time in one of the franchised locations to learn about the business, evaluating the franchisor’s audited financial statements, reading the 23 Items of the FDD and having the legal documents reviewed by an experienced franchise attorney. If the prospective franchisee is careful in selecting a good franchise and evaluating it thoroughly, franchising can be a great method for a woman leaving the corporate world (or a woman returning to the work world after having children) to run her own business. As the statistics show, franchised businesses are far more successful than are start-up businesses which have a high failure rate.

  11. Nancy,

    Thanks for stopping by, and chiming in.

    Yes; selecting the right franchise, and then researching it correctly are the key.

    It’s my mission in life to make would-be franchise owners do both. Correctly.

    We haven’t talked in a while.

    How are things in Philly?

    The Franchise King

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