Pathways to Black Franchise Ownership program
The Multicultural Foodservice & Hospitality Alliance (MFHA), with anchor sponsor PepsiCo, has launched Pathways to Social Equity Franchise Ownership, an innovative program that equips potential Black owners to operate high-performing businesses. Pathways represents a strategy to impact systemic change in the industry by introducing an ownership model that is based on social equity and supported by industry leadership.
MFHA has joined with 4THMVT, an LA-based social equity organization that vets, trains, and partners with individuals from underserved communities to own and operate competitive businesses. 4THMVMT strives to remove barriers to Black ownership entry and accelerate ownership outcomes for those seeking new opportunities to own, manage and expand their careers through foodservice franchisee ownership.
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The Multicultural Foodservice & Hospitality Alliance (MFHA) launched the Pathways to Black Franchise Ownership initiative for the restaurant industry in January of 2021. Pathways was inspired by a commitment of $2.5 million dollars over five years from PepsiCo as part of the company’s racial equity journey. MFHA was selected to receive the funds because of its 25-year history of working to advance career and business opportunities for people of color in the restaurant, foodservice and lodging industries.
Pathways presents an opportunity for the companies to grow their brand while helping to create wealth in the Black community by embracing a social equity ownership model. The Pathways initiative will identify, finance and prepare aspiring Black entrepreneurs to operate high-performing restaurants.
The restaurant industry was among the hardest hit sectors by Covid-19 and the effects are still rippling across the industry. Two months into the pandemic, 40 percent of America’s restaurants were shuttered, and 8 million employees were out of work—three times the job losses seen by any other industry. According to the National Restaurant Association, sales fell 34% by August of 2020, dropping by $165 billion dollars and keeping the industry on pace to lose $240 billion in sales in 2020.
Training and access to capital are the biggest barriers for Black women and men who want to own their own business. Through Pathways, the restaurant industry has the opportunity to create tangible lasting change in the communities they serve by helping to increase Black ownership. Ownership is a critical element of racial and social justice. And economic mobility cannot be achieved until Black Americans have a fair opportunity to participate in the nation’s shared prosperity.
MFHA targets brands that want to grow and that have leaders who see the potential of how a social equity model can create new Black restaurant owners. New or established brands with regional or national presence are all potential partners for the Pathways Initiative. Partner contributions may include financial support, flexible financing, waived franchisee fees and other ownership incentives and training services.
Non-franchisor brands can support Pathways with financial and in-kind contributions critical to the success of the Pathways Program and its future franchise owners.
The profile of Pathways candidates includes the following:
- Community candidates who aspire to be entrepreneurs.
- Foodservice professionals who aspire to be owners.
- Established business owners from outside of the restaurant industry.
- Existing Black franchisees seeking to expand their business portfolio.
Professional development and business training will be provided as part of the program for all participant with the exception of established multi-unit franchisees.
MFHA is identifying markets in which to pilot the program that may include Atlanta, Chicago, Houston, and Los Angeles. Additional cities may be added as the program grows. City selection criteria is being finalized and will include factors such as brand growth plans, city economic development initiatives and the talent pool from which to recruit potential owners.
- Community candidates who aspire to be entrepreneurs.
- Foodservice professionals who aspire to be owners.
- Established business owners from outside of the restaurant industry.
- Existing Black franchisees seeking to expand their business portfolio.
“As part of our initiative to support Black-owned restaurants, we’re proud to partner in unlocking access to ownership, recognizing it can have a massive positive ripple effect benefiting Black communities,” said Scott Finlow, Chief Marketing Officer, PepsiCo Global Foodservice. “We hope our investment will create a ripple effect of its own, inspiring more companies to get involved.” – Pepsi
Pathways Coalition: MFHA is creating The Pathways Coalition– a collection of industry partners, foundations, banks, and private equity firms to support and invest in the recruitment, training, development and success of Black-franchise owners. Multiple pools of capital are required to drive the scale of the solution. Funding opportunities include capacity building grants for MFHA to manage the program, small business ownership grants to Black business owners, and equity or program investment funding to support all or part of a franchise startup cost.