Franchise buyer offers solutions to saving black businesses

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By Chinta Strausberg


Recently appearing on WVON’s Cliff Kelley show Kevin Hicks, managing partner of Atlanta-based Blackman and Associates, offered to teach minorities how to buy up franchises as a collective economic venture and laid out a plan to help them share in the American dream of building and sharing wealth in this trillion dollar industry.

Making good his promise to have another African American roundtable on how to save black businesses from closing, Kelley interviewed Josephine Wade, manager of the historic Josephine’s Restaurant, 436 E. 79th Street, her son, Victor Love, the owner, Kham Beard, former owner of Kham & Nate Shoes who now manages 150 apartments, Spencer Leak, Sr., president of the Leak Funeral Homes, and Hicks who gave a string of solutions he says can prevent black-owned businesses from closing.

The first solution Hicks gave was Kwanzaa’s principle number 4—better known as Ujama (pronounced, oo-JAH-mah) or cooperative economics.

“I have seen in my business the ethnic groups like Pakistanis and Asians often have coalitions or associations even though they are competing businesses. They use those coalitions to do things like get preferential bank rates…to do collective purchasing which is nothing different than what many of the franchise businesses do collectively in order to do the same thing. It is very prohibitive to buy a product what ever your business.”

Hicks gave an example of the funeral home business here in Illinois. “There are several suppliers that provide caskets to all of the funeral homes. Why can’t the black homeowners collectively form an association? It doesn’t mean that they can’t compete for the business itself but in buying the product why can’t they collectively negotiate a group rate for purchasing?

“Why can’t they select a bank that they target and say we’re going to negotiate credit terms? We’re going to negotiate lines of credit that the group will have the ability to partake in? I think we have to practice collective economics and still keep our independence in terms of where we get our business …. I think we can do that,” said Hicks.

He also urged African American businesses to refurbish their businesses; however, Wade said, “All of us are suffering from the lack of support. I have went through my savings, remodeling, maintaining and fixing up and sometimes I remember when Gladys’ remodeled, people quit coming, she said referring to the popular but now shuttered Gladys Restaurant.

When Hicks suggested that blacks invest in their businesses, Wade said she does not feel she has to either tear down or remodel her restaurant because she continues to maintain her business. “I think it’s elegant. I compare this restaurant to downtown or Rush and it’s still 79th Street Rush Street as far as I am concerned,” said Wade who just celebrated her birthday Tuesday while working her usual 18-hour a day routine.

On Hick’s idea of collective economics, Wade said she is receptive but admits most African Americans are wary about joint venturing with each other.

While admitting there is a general distrust among blacks to participate in group buying, Hicks said he is helping people of color to buy up existing franchises that are usually profitable.

Hicks, who purchased 16 Churches Fried Chicken restaurants for $4.5 million that produced $12.5 million in revenues and $1.7 million and profits and employed more than 300 people is currently looking at buying five Dunkin Donut restaurants in Chicago. He will enter into an agreement to open three additional brand new units which will create 45 new jobs.

Currently, Hicks said his group is looking at buying 24 Burger King restaurants, but is proud to be able to assist other people to buy franchises so they can create wealth for their families, create jobs and provide income and opportunities for others.

He gave as an example at his Burge King stores in Miami he pays his Chief operating Officer (COO) $150,000 and his managers from $40,000 to $50.000. “We are providing valuable experience and transferable skills,” Hicks said in a telephone interview.

Hicks gave African Americans wanting to start a business, participate in buying franchises or enhance their existing business following these additional recommendations.

1.  Embracing Technology in your marketing, purchasing, and data capturing functions.

2.  Diversify your product offerings and services.

3   Reinvest in your business (facility, staffing, education, and networking)

4.  Create associations/business groups in your industry for collective buying of products and supplies to reduce costs.

5.  Develop new banking relationships early for access to capital. Do not limit yourself to just local sources.

6.  Increase payment options (credit cards, buying cards, etc.).

7.  Devise succession plans to transfer leadership of your business.

8.  Utilize new marketing and promotion practices and strategies.

9.  Community consumer and business education and advocacy.

10.  Customer service training. A major complaint in our businesses particularly with this generation workforce is customer service is poor, disinterested, and disengaged. We must invest in training and developing a customer service program, which will increase sales, customer loyalty, referrals, and team environment.

11. Leverage your business strengths. Focus on relationships and leveraging them, whether it is with the churches, local organizations, schools, businesses, or social/ethnic groups.

12. Expanding on an earlier idea. Giving customers more options to pay you (online purchasing).  Develop a website presence if appropriate for your business.

13. Maximize real estate with other business offerings that are related in that same space. An example would be that many of the old time dry cleaners expanded by allowing self-serve laundry machines in their space, as well as offering this service themselves, in the form of wash and fold.  They have also shoe shine service, and vending machines. This is an example of creating four additional businesses with multiple sources of revenues, all for the same rent!

14. They should also have a bowl and have their customers drop their cards into them offering a free dinner or wash as a reward. This also helps to build up their client listing.

15. Restaurants, he said, should consider catering. As a board member of the 100 Black Men in New York, Hicks has their meals catered for their meetings. Businesses, he said, should also consider delivering meals to their customers which is yet another revenue stream.

In building wealth, Hicks said it is key to “maximize their real estate, whether they own or rent, by adding other brands to their business to increase their revenue all under the same roof.”  Hicks gave as an example a laundromat where vending machines can be added, a dry cleaning services, a wash and fold service and a shoeshine business.  “You’ve added several additional streams of revenue all under the same roof,” he said.

Chinta Strausberg is a Journalist of more than 33-years, a former political reporter and a current PCC Network talk show host.

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