Wendy’s on Monday officially kicked off a new franchise recruitment initiative to increase ownership among underrepresented populations, particularly women and people of color.
Dubbed “Own Your Opportunity,” the initiative seeks to expand franchise ownership opportunities for all, but addresses what some argue is a particular challenge for underrepresented groups: Financial requirements and access to capital.
“To be the best Wendy’s we can be, we must make available opportunities for everyone who wants to grow with us,” said Todd Penegor, Wendy’s president and CEO, in a statement. “The Wendy’s brand truly thrives when our system reflects the diversity of our customers and restaurant teams, and when our franchisees are highly engaged and growing together with us.”
Several aspects of the initiative have already been rolled out. The move supports Wendy’s announcement in 2021 of new goals for creating a more diverse franchise base, as well as building a more inclusive leadership and management team.
Under the Own Your Opportunity program, for example, the Dublin, Ohio-based chain has eased financial requirements for franchising.
The minimum financial requirements for a single-unit and multi-unit franchisee is having a minimum net worth of at least $1 million and at least $500,000 in liquid assets. Previously, Wendy’s required candidates to have a net worth of at least $2 million and at least $1 million in liquid assets.
In addition, Wendy’s said it has expanded economic opportunities for new franchisees working with three preferred lenders: City National Bank, Huntington National Bank and Wintrust Franchise Finance.
The burger chain in October also became a Mission Partner for First Women’s Bank, what it calls the first female-owned and led commercial bank in the U.S., which Wendy’s said would help “bridge the gender gap in lending” and empower female entrepreneurs.
Last year the company created a $100 million built-to-suit development fund to fuel growth in underdeveloped trade areas, where Wendy’s secures and builds restaurants and hands over the turnkey operations to franchisees. Priority is given to franchise candidates who cannot otherwise access the required capital for new restaurant development, the company said, and it was expected to drive 80-90 new franchised units between 2022 and 2025.
In an interview last year, Penegor described the built-to-suit program, saying the company pays for the building, while the franchisee is responsible for equipment and signage, and pays a slightly higher royalty rate.
Wendy’s has also introduced new restaurant formats that enable ownership with lower financial commitments, the company said, including options for use of kiosks, modular buildings and drive-thru-only restaurants, for example. A new Frosty Cart was recently launched at a zoo in Tampa offering variations on the sweet frozen treat.
Last year, Wendy’s also announced a deal with REEF Technology to add 700 delivery-only kitchen sites, along with smaller brand extensions in Walmart stores. Wendy’s last year increased its development goal from 8,000 restaurants by 2025 to 8,500 to 9,000, with up to 50% of new units located in non-traditional sites.
And the company also conducted surveys and focus groups to identify tools and resources to help existing franchisees thrive and grow.
It was the first survey to look at the gender, race and ethnicity of franchisees within the Wendy’s system, to create a baseline — though the company declined to share the results.
Abigail Pringle, Wendy’s president of international and chief development officer, said in an email through a spokesperson the survey found that franchisees would like more peer-to-peer networking and mentoring, support for leadership opportunities and an increase in knowledge of financing and other services available.
Wendy’s this year plans to introduce a new Franchisee Onboarding Program to better equip franchisees with tools to succeed, she added. Franchisees will meet with representatives from more than 20 operating disciplines across the business to learn best practices, policies, procedures and where to get help.
“In all, the company is making a significant investment in time and training hours to onboard each new franchisee — again, something we heard was very important from our survey and focus group learnings,” Pringle said. “Our new program will also help create global consistency for onboarding and strive to help foster an inclusive mindset and culture at all levels.”
Other quick-service franchisors have also set out to attract more women and franchisees of color with programs that go beyond financial aspects to include more education and networking.
Yum Brands Inc., for example, last year launched the new Center for Global Franchise Excellence in partnership with the University of Louisville in Kentucky, designed to attract women and people of color into the company’s franchising program. The program includes scholarships, an accelerated education to prepare franchise candidates for Yum’s business model, and sets them up with mentors.
Earlier this year, Yum also announced a fellowship program with the historically Black college Howard University in Washington, D.C., for which 10 Black and Latino MBA students have been selected for a five-month training program. At the end, two of the students will be given keys to a Yum Brand restaurant.
McDonald’s in December committed $250 million toward a five-year plan for attracting more minority franchisees. The plan includes reducing upfront equity requirements for eligible franchise candidates, as well as access to the chain’s banking partners for financing solutions. McDonald’s also said it would expand franchisee recruitment and training to people from historically underrepresented groups.
Contact Lisa Jennings at [email protected]
Follow her on Twitter: @livetodineout
