Participation Patterns of Women in Franchising

There is increasing evidence that women are becoming more active in franchising. The proportion of franchised units owned by women has grown 68 percent, from 11 percent of all units in 1986 to 18.5 percent in 1992 (The State of Small Business 1990). The creation of the new Women's Franchise Committee of the International Franchise Association (Barnes-Bryant 1994) and the fact that McDonald's counts more than 25 percent of its franchisees as women and minorities are examples of their increasing presence. However, few studies to date have systematically examined women's participation in franchising. A recent Request for Proposal offered by the Small Business Administration (SBA) on "Women in Franchising" (SBA 1994) indicated that even at the federal level little is known comprehensively about women's share as franchisees or franchisors, about the sectors or industries in which women participate most, or about the performance of women franchisees and franchisors. All the same, women-owned businesses are becoming increasingly important to the U.S. economy, contributing more than $250 billion annually and creating new businesses at two to three times the rate of their male counterparts ("New Economic Realities" 1988). Since 1970, the share of women-owned businesses has grown from only five percent to more than thirty percent, representing nearly 6 million of the nation's 16.5 million non-farm sole-proprietorships (The State of Small Business 1993). Women-owned businesses can today be found in every sector of the economy and every region of the U.S. (The State of Small Business 1993). Despite this increasing presence of women as business owners, their activities in franchising have not been explored. This is an important gap. Franchising has been identified as one of the fastest growing methods for doing business (Dant and Kaufmann 1995; Dant, Kaufmann, and Paswan 1992), and comprises approximately one third of all retail sales (Statistical Abstract of the U.S. 1991). Extensive research in the field of entrepreneurship has addressed the processes of start-up, individual characteristics of entrepreneurs, and environmental factors influencing start up and entrepreneurial characteristics; however, few studies have examined the growth and expansion activities of women business owners (Brush 1992). Moreover, we do not know how women's participation in franchising compares with their experience in sole proprietorships, corporations, and other forms of business. We also do not know the extent to which franchising has been employed as a vehicle of expansion by women-owned businesses. More importantly, the overwhelming majority of research on women business owners does not compare their activity/experience to that of male business owners (which makes benchmarking less than perfect), and any explorations of sectoral and industry similarities and differences are limited. In sum, publicly available data and academic studies on women as franchisors are generally limited. As a step towards filling this gap, this exploratory study describes the "state" of women as franchisors. Our general purpose is to answer the question What is the nature of the participation of women as franchisors? In particular, this study investigates gender-based comparisons of (1) total participation differences; (2) participation differentials related to the male/female image of the business sectors; (3) industry sector-based patterns; and (4) franchise system size-related differentials. The gender variable was operationally measured in terms of (1) the gender of the president of the franchise system; and (2) the gender of the person in the franchisor's organization designated as the contact point for discussions of business development and franchising opportunities within that system. As we later show empirically, the latter group was also comprised of very senior executives in franchisor organizations. These corporate officers are presumably capable of significantly influencing activities like recruitment policies for new franchisees, which in turn, would impact the gender balance of the franchisee-owners associated with their systems. …