Building the Pipeline: Practical Steps to Grow Black Franchise Ownership
Black History Month is both a celebration and a call to action. It honors the achievements of Black leaders, entrepreneurs, and community builders who advanced opportunity in the face of systemic barriers—and it challenges today’s business community to widen the pathways to ownership.
Franchising is one of the most powerful ownership models in America. It offers a playbook, a brand, training, vendor relationships, unit economics, and operational systems—assets that can reduce the risk of starting from scratch. Yet access to franchising, like access to many wealth-building vehicles, has not been evenly distributed. If franchising is about replicable success, then the industry must ask: who has historically been invited into that success, and what practical steps can we take now to expand the circle?
This Black History Month, it is worth focusing on a simple idea with profound implications: increasing Black franchise ownership is not only the right thing to do—it is a strategic growth lever for brands and a durable investment in local economies.
A legacy of entrepreneurship—and the unfinished work of equitable access
Black entrepreneurship is not new; it is deeply woven into American history. From early mutual aid societies and Black-owned enterprises formed during and after Reconstruction, to the growth of business districts like Tulsa’s Greenwood (“Black Wall Street”), Black entrepreneurs have consistently built businesses as engines of independence, resilience, and community stability.
But history also makes clear why “entrepreneurial spirit” is not enough on its own. Discriminatory lending, redlining, unequal access to capital markets, and fewer high-net-worth networks have had compounding effects over decades. These realities influence who can write a franchise check, secure a lease, withstand a slower ramp-up period, or qualify for traditional financing—especially in the first unit, where risk is highest and margins can be thin.
The result is that many highly qualified Black operators and professionals—people with the talent to run multi-unit enterprises—are simply underrepresented among franchisees and franchisor leadership.
Black History Month gives franchising an opportunity to be explicit about closing that gap, using the industry’s strongest tools: process, systems, and accountability.
Why franchising is uniquely positioned to expand Black ownership
Unlike many independent small businesses, a well-structured franchise system can lower key barriers:
- Operational know-how is built in: Training, SOPs, site selection support, and ongoing coaching can shorten the learning curve.
- Brand demand can accelerate revenue: A recognized brand can reduce early marketing friction and boost initial traffic.
- Purchasing power improves unit economics: Vendor networks and negotiated pricing can support margins.
- Repeatability enables multi-unit wealth building: Franchising is one of the clearest paths from single-unit ownership to multi-unit scale.
In other words, franchising can be an on-ramp to ownership—when access is designed intentionally.
The real challenges Black franchise candidates still face
To move beyond slogans, we have to name the practical obstacles that show up in real deals:
- Capital stack gaps: Even strong operators can struggle to assemble the full capital stack (franchise fee, build-out, equipment, working capital, and reserves). Many deals fail not because the candidate is unqualified, but because the financing plan is fragile.
- Financing approval friction: Traditional lenders are conservative. If a candidate is a first-time franchisee without prior ownership history, approvals can become slower, more document-heavy, and more restrictive—sometimes resulting in smaller loan amounts or higher reserve requirements.
- Site selection and lease leverage: Real estate often decides the outcome of a unit. Candidates without deep broker relationships can end up with weaker locations or less favorable lease terms, which then pressures unit economics.
- Network access and mentorship: Many successful franchisees cite “who helped me” as much as “what I knew.” In franchising, informal networks matter—introductions to lenders, landlords, attorneys, insurance partners, and experienced operators. When those networks are uneven, outcomes can be uneven.
- Underwriting that does not reflect operational ability: Some screening processes overweight net worth and liquidity while underweighting operator capability, leadership experience, community market knowledge, and execution track record.
None of these challenges are abstract. They show up in LOIs, credit memos, lease negotiations, and day-to-day ramp-up realities.
What franchisors and franchise consultants can do now
Franchise development is not only about “selling units.” It is about building a healthy, scalable network of capable operators who can win in their markets. If the industry wants more Black franchise ownership, the path is practical and measurable.
1) Build a real ownership pipeline (not a campaign)
Brands should treat ownership expansion like any other growth initiative: pipeline strategy, partner strategy, KPIs, and reporting. That means:
- Setting clear goals for candidate flow and conversion
- Tracking progression through the funnel (lead → qualified → validated → awarded → opened)
- Identifying where candidates drop off (often financing or real estate) and fixing those leaks
2) Strengthen the capital strategy: lenders, incentives, and smarter structures
Franchisors and consultants can materially improve outcomes by improving the capital plan:
- Develop relationships with franchise-friendly lenders and SBA partners
- Provide standardized financial packages that make underwriting easier (clear models, itemized CapEx, working capital assumptions)
- Consider structured incentives that protect unit economics (e.g., reduced initial fee paired with performance milestones, or phased development schedules that de-risk the first unit)
- Encourage realistic reserve requirements so new owners are not cash-starved at month three
This is not about lowering standards—it is about building deals that can survive.
3) Weight “operator capability” as heavily as “balance sheet”
A brand that values long-term performance should screen for:
- People leadership and hiring discipline
- Sales and service execution
- Operational rigor and coachability
- Local market understanding
- Resilience under pressure
Financial qualifications matter, but operational excellence is what produces royalties, brand growth, and multi-unit stability.
4) Provide real estate and opening support that is truly “hands-on”
The opening phase is where many candidates feel the most exposed. Strong franchisors:
- Help candidates avoid overpaying for rent or build-out
- Provide vendor introductions and GC discipline
- Set realistic pre-opening and ramp-up plans
- Coach marketing execution at the local level, not just at the national brand level
If a brand wants to expand ownership inclusively, it must reduce “navigation burden” at the moments that matter most.
5) Create mentorship loops that scale
The most cost-effective support is peer mentorship:
- Pair new franchisees with high-performing operators
- Build structured office hours and regional cohorts
- Recognize mentors and reward contributions
Mentorship improves performance. It also strengthens culture and retention.
The business case is clear
Expanding Black franchise ownership is not charity. It is good business.
- Market opportunity: Black consumers are a significant and influential part of the American economy. Owners who understand their communities can build trust faster and tailor local marketing more effectively—while still operating within brand standards.
- Network strength: More diverse ownership often leads to stronger local partnerships and higher employee engagement, improving unit stability.
- Brand resilience: Franchise systems grow stronger when they attract the best operators, not just the most connected.
Brands that build inclusive, performance-driven ownership pipelines are positioning themselves for durable growth.
A Black History Month commitment that matters
Black History Month is a moment for recognition—but also for measurable action. The franchising industry is built on the belief that opportunity can be systematized and scaled. That is precisely why it has the potential to be a leading force in expanding access to ownership.
For franchisors, franchise consultants, and development teams, the challenge is straightforward: design your pipeline, capital strategy, support model, and mentorship infrastructure so that highly capable Black candidates can enter, open, and scale with the same probability of success as anyone else.
When we expand ownership, we expand the franchise system’s future. And when we do it thoughtfully—through stronger deals, better support, and accountable process—we create what Black History Month ultimately calls for: progress that lasts.
About the Author
Ozzie Grupenmager is a franchise development and operations consultant with decades of experience supporting franchisors and franchisees across growth, unit economics, and scalable systems. He has worked extensively in franchise strategy, brand expansion, and ownership development. Contact Ozzie at ogrupenmager@thefranchiseconsultingcompany.com.











