Race Bias #17 - "The Minority Franchise"
A preferred way to favor minorities in business is for a restaurant chain to grant franchises to minority owners on a preferential basis.
Typically, the parent corporation provides 100% financing.
The snippet below is included to show that being a minority is the _only_ way to get a franchise from Pizza Hut, a Pepsi unit.
BUSINESS & RACE
By Leon E. Wynter
03/24/92 WALL STREET JOURNAL (J), PAGE B1
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Former Pizza Hut Official Takes Big Franchise Slice
PIZZA HUT christened the nation's largest black-owned fast-food franchise company last month.
Larry Lundy, until recently the chain's vice president of restaurant development, purchased 31 stores in the New Orleans area for a price that industry specialists estimate at $15.5 million.
Pizza Hut, a PepsiCo subsidiary, says it is making developing minority franchises a priority. Last fall the chain put another former executive, Mexican-American Eugene Camarena, into 12 Amarillo, Texas, stores. In both cases, Pizza Hut, which owns more than half of the chain's 7,500 U.S. stores, sold pieces of its own territory. Being a minority "is now the only way to get into a Pizza Hut franchise at this time," says Vincent Berkeley, vice president, minority affairs.
But the company's system historically has been hard for minorities to crack. Unlike other chains, Pizza Hut franchises large, exclusive geographic areas, making it tough for newcomers to start businesses from one or two stores.
Pizza Hut won't disclose figures, but sources familiar with the chain say it has about 300 minority-owned stores. That figure probably will shrink soon. The company is expected to buy about 240 stores from Cuban-American franchisee Arturo Torres to resolve a legal dispute. * * *
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