2024 Trends for Latinos in Franchising

2024 Trends for Latinos in Franchising

Latinos Drive U.S. Economy, Yet Lag in Franchise Ownership: The Latino Franchise Association’s Vision for Inclusive Growth

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If U.S. Latinos were a country unto themselves, they would represent the fifth largest economy in the world, according to a report released by the nonprofit Latino Donor Collaborative. The $3.2 trillion gross domestic product generated by U.S. Latinos ranks only behind that of the U.S., China, Germany and Japan.

Latinos outpace non-Latinos in the United States by wide margins in purchasing power and annualized income growth, as well as business creation, growth and resiliency. Yet, while they make up 20% of the U.S. population, Latinos comprise just 1% of franchise owners – a statistic the Latino Franchise Association seeks to change, says LFA founder and CEO Rafael Alvarez, CFE.

2024 Trends for Latinos in Franchising
Founder and CEO Rafael Alvarez

“Greater Latino involvement in franchising has the potential to create a more dynamic, innovative and inclusive franchise system, benefiting both the Latino community and the broader U.S. economy,” says Alvarez, whose three-plus decades of business and franchising experience includes founding ATAX, the first Latino-owned tax preparation franchise in the United States. “Greater Latino involvement contributes to economic development, job creation, and a more vibrant and resilient business landscape.”

Latinos Drive the U.S. Economy

U.S. Latinos represent the third fastest-growing economy on the planet, potentially even rivaling China’s growth rate, says Sol Trujillo, Latino Donor Collaborative co-founder and board chairman.

As CEO of L’Attitude Ventures, a venture capital firm he founded in 2019 to invest in businesses led by Latinos, Trujillo offers these additional statistics: Over the past decade, Latino annualized income has increased 4.7% as compared with 1.9% for non-Latinos; Latino consumption and purchasing power have been growing 2.1 to 2.4 times faster than non-Latinos; and U.S. Latinos were responsible for 20.9% of the real GDP growth in the United States.

“U.S. Latinos are leading the growth of our country’s GDP, entrepreneurship, consumption, innovation, productivity and labor force. That is why I believe investing in this cohort is investing in the present and future of all Americans,” Trujillo says.

Investing in the Latino Market

According to the Hispanic Marketing Council, marketers should prioritize the Hispanic market as “the American mainstream.”

“U.S. Latinos are not a niche market, nor small, nor as sometimes described as a market of the future,” Trujillo says. He emphasizes that the Latino cohort is youthful, with a heavy concentration between the ages of 11 and 14, and 1 million turning 18 every year, “so it’s only going to grow for the next 30 to 40 years, and the U.S. is going to be buoyed economically by this cohort.”

  • After a downturn in 2023, Hispanic consumer confidence is slightly stronger going into 2024, with 68% surveyed saying they expect to be better off financially, according to a Florida Atlantic University report.
  • Latinos align with brands that practice initiatives to improve diversity, equity and inclusion by providing transparency in hiring practices, making products accessible to all, hiring and promoting diverse talent, and ensuring positive, diverse representation in communications.
  • Hispanics show greater rates of adoption of new technologies; among racial groups, Hispanics use fintech at the highest rate, 92%, which is greater than white, Asian American and Black consumer usage.
  • Latinos greatly value brands that play a positive role in their community and they’re more likely to buy from brands that feature people like them in their advertising, which, in addition to representation, should feature authentic, relatable storylines.

Latino Economic Power vs. Franchising Participation

While Latinos have made enormous economic progress, they continue to lag in participation in franchising. Alvarez says the challenge for the Latino Franchise Association in converting the economic power of U.S. Latinos into franchising lies in overcoming various barriers including:

  • Access to capital.
  • Educational disparities.
  • Language barriers.
  • Discrimination and bias.
  • Lack of role models and mentors in franchising.
  • Cultural differences.
  • Risk aversion.
  • Legal and regulatory challenges.

To break down these barriers, the LFA has launched an aggressive campaign to connect the Latino community with franchisors, franchisees and others involved in franchising. Webinars, seminar, podcasts and live social media transmissions, as well as events including conferences, expos and conventions are planned this year around the country, including the inaugural Latino Franchise Association Convention in December in San Juan, Puerto Rico, which is to be an annual event.

Through these events and programs, Alvarez says the LFA is providing education and training in business management, franchise models and industry-specific skills, as well as resources to facilitate effective communication and ensure that language differences don’t impede access to information and opportunities.

2024 Trends for Latinos in Franchising

The association is also working to foster cultural competence and greater sensitivity within the franchising industry to the diverse experiences and backgrounds of Latino entrepreneurs. The LFA is also establishing partnerships with franchisors to promote diversity and inclusion and adopt programs such as targeted recruitment and training.

In addition, the LFA is highlighting successful Latino franchise owners as role models, and working to provide greater networking and mentorship opportunities.

“Addressing issues that limit Latino participation in franchising requires a comprehensive approach that involves policies aimed at promoting financial inclusion, educational opportunities, reducing discrimination, and fostering a more inclusive business environment,” Alvarez says. “Encouraging diversity and representation within the franchise industry can also help break down barriers and inspire more Latinos to pursue franchise ownership and franchise investment.”

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Lisa Ocker’s career began at her hometown paper, The Baytown Sun, covering everything from city government to chemical plant disasters, a hurricane and a controversial FEMA buyout of a flood-plagued neighborhood. From there, she moved to South Florida, reporting for the Palm Beach Post and South Florida Sun-Sentinel newspapers, and serving as editor of the regional magazine, Boca Raton. Returning to her home state, she led the re-launch of SUCCESS magazine as editor after a Texas-based entrepreneur bought the 100-year-old brand.

Lisa’s work also has appeared in The New York Times, Chicago Tribune and Newsweek. She has covered major news events including the space shuttle Challenger explosion and the rape trial and acquittal of William Kennedy Smith, nephew of the late President John F. Kennedy and Sen. Edward Kennedy. Her coverage of immigration issues included reporting on Haitian and Cuban refugee crises while traveling with the U.S. Coast Guard and from the U.S. Naval Base at Guantanamo Bay, Cuba. Her work with SUCCESS included profiles of entrepreneurs Steve Case, Ted Turner and the late Tony Hsieh.

Now living in and working from Santa Fe, NM, Lisa enjoys sharing the challenges and successes of franchisees and franchisors as a contributor to FranchiseWire and Franchise Consultant Magazine.
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