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Why Aren't There More Hispanics in Franchising?

"They realize from the consumer side Hispanics are a great source of clients or customers. They began addressing this opportunity from the consumer side, making it very easy for them to bring on Hispanic [franchisees] to connect and penetrate and then relate to this community at the local level," Torres says. "They go beyond just putting [information] out and translating it. From a communication standpoint, from a community involvement, they're really making a business case for it."

As a result, when it comes to taxes, Hispanics don't think of H&R Block (HRB) or Jackson Hewitt, "they think of Liberty Tax," Torres says. "That's a great example."

7-Eleven is another group making a lot of progress within the Hispanic franchising community, Torres says. The have put "programs in place to address from the consumer side and as a result are recruiting a significant number of franchisees," he says. (Both companies advertise on Torres' websites.)

Still, it takes money to buy into a franchise. And with the capital markets remaining a tough avenue, opening a franchise may be a pipe dream for many Hispanics.

Rob Bond, president of World Franchising Network and founder of The National Minority Franchising Initiative, a program designed to encourage minority ownership of franchises, says "it's clearly money. Some of it may be a language barrier or lack of professional experience, but money is the key determinant" in why there are few Hispanic-owned franchises.

"The franchising communities would love to have more Hispanic franchisees if they're qualified and if they can foot the bill. That may be the disconnect. Someone has got to have some experience and some money to be attractive to a franchisor," Bond says.

It's another reason why Torres and other observers say the need for franchise awareness among the group is so great.

"Franchising is not only fast food and retail," Torres says. "Fast food franchises cost hundreds of thousands of dollars. At a senior care or tutoring franchise, the investments are lower. There are a lot of franchises at $100,000 and below."

-- Written by Laurie Kulikowski in New York.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.
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