The International Franchise Association has announced plans for “MinorityFran,” an initiative to help member companies recruit additional minority franchisees into their systems.
MinorityFran will build on relationships through the IFA’s Diversity Institute with organizations such as the National Urban League, the Association of Small Business Development Centers, the U.S. Pan Asian American Chamber of Commerce and the Minority Business Development Agency of the U.S. Department of Commerce.
Ronald Harrison, IFA Diversity Institute chairman, said in a news release that MinorityFran is designed to assist IFA-member companies that are committed to expanding opportunities for minorities in franchising through employment, franchise recruitment and vendor relations.
Blacks, Hispanics, Asians and American Indians are expected to account for the majority of population growth in the United States in coming years. Minorities already represent $1.8 trillion in consumer purchasing power, according to a 2004 Selig Center study, and that number is expected to increase.
Minority-owned businesses are growing at a rate seven times greater than all U.S. businesses, according to a 2004 report by the Minority Business Development Agency.
Participating companies will offer incentives including reduced franchise fees, special financing terms and other special assistance. Through MinorityFran, they can either establish a “race-based” program (open to ethnic minorities) or a “place-based” program open to all prospective franchisees, regardless of race, who locate their units in traditionally under-served communities, such as enterprise zones or historically underutilized business zones.
Ogden Associates conducted a study for the National Retail Federation in December that shows just how important the customer is to retailers.
The customer centricity study found that more retailers are utilizing customer data (customer insight) to improve marketing programs and merchandise offerings – a fundamental, yet often elusive, goal of retailers’ customer relationship management programs.
The survey found that 65 percent of retailers say their technology expenditures for customer relationship management will increase this year. There also was overwhelming support among retailers for strategies that improve the customer experience.
Nearly 98 percent of the respondents said that improving the customer experience was important, while 97 percent said that increasing customer satisfaction was a priority.
Retailers are probing for better understanding of customers’ lifestyles and life stages. The survey found that retailers are deploying a variety of techniques to build customer understanding, including market and customer research, focus groups, store intercepts, supplier input, Web statistics, third-party data and Internet research.
The study also showed that retailers really are listening, with more than 35 percent obtaining direct customer feedback on a daily basis – a notable increase from 2004, when less than 10 percent of retailers obtained weekly customer feedback.
Reflecting a major trend toward more strategic use of information, 67 percent of respondents said they used customer information for merchandise planning, up significantly from 42 percent of respondents in 2004.
Retailers also see customer insight as important in developing marketing strategies (92 percent), advertising budgets (69 percent), catalogue targeting (67 percent), promotions (83 percent) and customer service (78 percent).
But despite these advances, the customer centricity study showed that retailers are still not achieving the return on investment they seek from customer knowledge-driven strategies and techniques. Sixty percent cited a lack of proven return on investment as an obstacle to the program.
Throughout the study there is evidence that retailers still have more to accomplish in improving their processes and organizational alignment. Only 44 percent of retailers have tackled this, although the study does predict that this will be a major focus of activity during the next several years.
Burger King has been making progress since Greg Brenneman took over in 2004. The chain has seen growing profits, better financial health, lots of advertising buzz and popular new products.
The question now is whether investors can be convinced of Burger King Corp.’s future. The Miami-based company’s parent, Burger King Holdings Inc., is still far from the financial success and profit margins of its two main rivals, McDonald’s and Wendy’s.
According to Thomson Financial, Burger King hasn’t specified too many details of its IPO plans. It hopes to raise up to $400 million, which would be the top U.S. restaurant IPO, but it hasn’t said how much each share would cost, what percentage of the company would be offered or when the sale would happen.
Last year, Burger King reported net income of $51 million on revenue of $1.99 billion, while McDonald’s reported earnings of $2.6 billion on revenue of $20.46 billion and Wendy’s International Inc. had $224 million in net income on revenue of $3.78 billion. That works out to profit margins of 12.7 percent for McDonald’s, 5.9 percent for Wendy’s and 2.6 percent for Burger King.
Joan Johnson covers retail for the Colorado Springs Business Journal.