The problem: Women and people of color are underrepresented among owners of fast-food franchises.
Why it matters: Critics contend that franchise ownership doesn’t reflect the employees, customers, or communities fast-food restaurants serve.
The solution: Major fast-food brands are providing financial incentives and launching education and other initiatives to increase franchise ownership among underrepresented groups.
Last year, in the middle of the pandemic, Wendy’s sold ten franchised restaurants along the eastern coast of Maine to two veteran investors who had left Wall Street to start their own firm. What made the deal stand out wasn’t the large number of opportunities available—Wendy’s overtook Burger King in 2021 to become the second-largest U.S. fast-food burger chain, opening more than 200 new restaurants globally. Rather, what made the deal notable was that the new Wendy’s franchisees, unlike the affluent white males that predominate among both Wall Street investors and fast-food franchise owners, were diverse.
In the wake of two years of racial and equality tensions around the world, some of the biggest brands in the fast-food restaurant industry—also known as quick-service restaurants, or QSRs—have launched initiatives to increase the number of women and other underrepresented groups in restaurant management and in corporate executive and leadership positions. Now they are taking those initiatives one step further by aiming to increase franchise ownership among underrepresented groups. McDonald’s, for instance, has committed $250 million over the next five years to increase diverse ownership. In February, Wendy’s announced its “Own Your Opportunity” initiative with a similar goal. Yum! Brands, parent company of Taco Bell, KFC, Pizza Hut, and The Habit Burger Grill, has committed $100 million over five years to promote equity, inclusion, education, and entrepreneurship for employees, frontline restaurant teams and communities around the world.
Abigail Pringle, president, international and chief development officer at Wendy’s, says the company’s goal is to better serve and reflect the diversity of its customers and communities, as well as to bring new talent into its franchise system. With plans to increase its restaurant footprint from approximately 7,000 today to between 8,500 and 9,000 by 2025, Pringle says that “increasing franchise ownership among women and underrepresented groups is key to driving growth.”