Diverse, inclusive businesses are those that actively seek, employ, and support people in every walk of life: All genders, ages, races, religions, cultures, and abilities. The true value of diversity lies in its wide range of perspectives and experiences that can be used to solve problems, increase competitiveness, and drive growth

While many companies may be increasing their focus on diversity and inclusion, there is still a long way to go. Minority purchasing power is expected to exceed $3 trillion in 2030, and by 2050 nearly half of the U.S. population will be people of color. Yet the vast majority (97%) of senior executive boards in the U.S. don’t reflect the current labor force and population demographics. At the same time, for every 100 men promoted to a manager position, only 79% of women are promoted. And in 2019, only 19.3% of people with a disability were employed, as compared to 66.3% of the employed population without a disability. 

As population demographics continue to evolve, it will be increasingly critical for companies to not only recognize the societal value of diversity, but its competitive advantages as well, and make sure current demographics are reflected in their workforce as much as possible. 

Let’s take a closer look at why diversification in franchise systems is a positive and how you can advance diversity within your own franchise. 

What diversity brings to the franchise industry

The franchise industry makes up an enormous economic segment closely tied to the everyday consumer and local communities. That’s why the moment is ripe for franchises to reflect the changing faces and experiences of its consumers by bringing a greater focus to diversity and inclusion within the business and the communities in which it operates. 

When franchises improve diversity, they can:

  • Strengthen recruiting and retention. A big part of staying competitive these days is investing in your people. By making diversity a central tenet of recruiting and hiring, franchises can attract and retain the quality employees they need to run a competitive business. The majority of employees (57%) and job seekers (67%) are on board, with diversity in the workplace now an important quality they look for in an employer. Focusing on diversity also helps franchisees build a broad pool of potential candidates to draw from when it’s time to grow the business. 
  • Improve business performance and revenue. Research shows a correlation between diversity and better decision-making, stating diverse groups tend to make fact-based decisions with fewer biases and less groupthink. Different groups of people also have different knowledge bases that can be used to improve franchise operations. With better decisions and richer knowledge comes better business performance, productivity, and revenue. In fact, companies that prioritize ethnic diversity and gender diversity are 35% more likely and 15% more likely, respectively, to increase revenue.
  • Boost employee morale. Diversity and inclusion initiatives tend to create a more satisfying and collaborative work environment, which raises overall employee morale. Fostering an inclusive environment causes employees to not only stick around in their jobs but also develop greater loyalty to the business and feel inspired and motivated to perform at their best. 
  • Enhance client relationships. Having a diverse franchise that reflects the diversity of its client base can lead to a more optimal client experience. This is because diverse businesses and teams are better able to identify, understand, target, and support a variety of client needs while also positioning themselves to discover potential untapped markets.

How franchisors can advance diversity and inclusion

There are several key initiatives you can undertake as a franchisor to advance diversity and inclusion:   

  • Assess the current franchise. Diversity initiatives can’t be done effectively without first performing a kind of “diversity audit” on the current franchise. You can do this by asking questions like the following: What’s the public perception of your franchise in diverse communities? Is your franchise a top choice, and if so, for whom? What are the demographics of your consumers, your franchisees, and your suppliers? Who are you advertising to, and who are you recruiting and hiring? This will help expose the areas where a greater effort is needed to boost diversity and inclusion and lay the groundwork for the rest of the ideas that follow.
  • Form the right partnerships to recruit diverse franchisees. Many franchise candidates either may not know about your franchise or may not think owning a business is within reach. One way to mitigate this is to partner with professional organizations, campuses, and community groups that value diversity. They have the resources to reach, educate, support, and share information with diverse candidates and existing franchisees, and can help you form beneficial connections with them.
  • Offer a variety of financial support. Diverse franchise candidates can sometimes be at an economic disadvantage and may need financial assistance. You can work with local banks and community programs that offer loan funds and financial assistance to get franchisees started, or partner with lenders that specialize in helping minority business owners, for example. 
  • Prioritize minority suppliers. Diversity of ownership isn’t the only way to advance diversity and inclusion. Another way is to seek diverse suppliers — such as women- or minority-owned businesses — that supply goods and services to franchisees. This not only helps strengthen relations with the communities in which franchisees operate but also increases competition among suppliers, resulting in better products and services.

How franchisees can foster diversity and inclusion

Increasing diversity and inclusion at the franchisee level is just as important. Seeding greater diversity among your workforce starts with the following: 

  • Find diverse job candidates in new ways. Sticking with traditional recruitment methods will yield traditional results. To increase the diversity of job candidates, branch out into areas you haven’t tapped yet, such as networking events for underrepresented communities, local community colleges, and government workforce development initiatives. 
  • Make job descriptions more inclusive. Consider using text-writing apps that help eliminate off-putting or old-fashioned language. Evaluate your list of “required” and “nice to have” skills so that the role appeals to the broadest swath of skilled applicants. Focus on the expectations of the role itself, rather than what the candidate has been able to accomplish in a past role. 
  • Change up the interview process. A traditional interview process can inadvertently discount candidates that don’t come from a certain culture, gender, or experience. Make sure the interview process fairly assesses the actual qualifications of candidates and doesn’t rely on outdated notions or stereotypes of what makes for a good interview. 
  • Be supportive. Hiring diverse workers is a good first step. Engaging and supporting them is the next necessary step to ensuring their success in your business. Setting up employee resource groups or working with external groups that offer career development opportunities further supports diverse employees and enables them to grow and flourish in your business.
  • Get involved in the community. Getting involved with community organizations and local professional groups helps you understand, respect, and connect to the diversity within which your business already exists. Being involved in the community creates strong, lasting ties that can help you build a pipeline of new, diverse workers and attract loyal clients.

Building diversity and inclusion over time

Creating greater diversity in a franchise is a process. It won’t happen overnight, nor is it without a few challenges and tensions that are a natural result of the change. But with commitment and time, these initiatives and procedures, including when undertaken and modeled at the franchisor level, can allow you to realize the business benefits and greater profitability that can come with a more diverse workplace.

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