All talk, no action

IN 1992, WALTER BRIDGFORTH JR. EMBARKED on a letter-writing campaign attacking national restaurant chains for their failure to build company-owned or franchise-operated businesses in urban, downtown communities. In fact, there hadn't been a new family-style restaurant chain in downtown Detroit since 1969, according to the 37-year-old real estate developer and president of W.B.B.J. Investment Co.

Bridgforth believed he had found an ideal location: East Jefferson Avenue, one of two main thoroughfares running along the Detroit River just shy of Canada. The highly foot-trafficked street is also home to a diverse group of residents, from senior citizens and lower-income families to upscale professionals. And it's just two miles from the business district, where the headquarters of General Motors and Little Caesar's Pizza are located.

Still, convincing a full-service chain to consider the area was an uphill battle for Bridgforth. Out of 30 inquiries, only four companies sent reps to look at the site: Bob Evans, Ram's Horn, Denny's and International House of Pancakes. IHOP was the only one to actually bite.

Because of Detroit's tarnished image and high unemployment rate, IHOP was leery about opening a restaurant there. But according to Richard K. Herzer, the firm's chairman and CEO, "Walter showed us that basically the area is moving in the right direction." In an astute move, Bridgforth also secured the support of Detroit Chief of Police Ike McKinnon, Mayor Dennis Archer and the local NAACP to ensure a safe and clean environment.

After two years of negotiations, the restaurant opened its doors last November. The franchise is owned by IHOP, which signed a 25-year lease with Bridgforth, who owns the building and the land.

Bridgforth, a former IBM sales rep, then sold IHOP on another idea: giving the restaurant a Motown theme. Out of the chain's 620 outlers worldwide, Detroit has the only IHOP with piped-in Motown sounds. Its walls are lined with album jackets and vintage photographs of Motown artists, as well as platinum records by Grammy Award-winning singer Anita Baker, Bridgforth's wife.

The Motown IHOP, which cost $1.5 million to build, is now singing to the tune of about $30,000 to $36,000 a week in sales, double the expectations of the franchise company. (The average IHOP grosses $800,000 to $1 million annually.) "This is going to be a $2 million restaurant its first year" says Bridgforth. By December, he hopes to own the Detroit IHOP, which seats 168 and employs about 85 people. The average IHOP costs $150,000 to $400,000; presently there are only two black-owned IHOP franchises.

Bridgforth is one of a growing number of franchising foot soldiers who are fighting for greater minority inclusion. His long battle is just one of many in the ongoing war between would-be minority franchisees and franchise companies. While these franchisors are forever publicizing their desire to increase the number of franchises owned by minorities, as well as those developed in minority communities, very little is being done to make this happen. When their representation should equal a brigade, minorities in franchising barely make up a small infantry. The vast majority of franchises don't have any African American owners.

After more than a decade of rhetoric about diversity initiatives, franchisors are still "not making any great effort to recruit or retain minority entrepreneurs," says Susan P. Kezios, president of the Chicago-based American Franchisee Association and Women In Franchising, a franchisee advocacy group. "There is a perception out there on the part of franchisors that minorities don't have any money, so why should they waste their time recruiting them."

More disturbing, a number of franchisors are willing to rectify the situation only when faced with discrimination suits. A prime example is the parent company of Denny's Restaurants, Flagstar Companies Inc. in Spartanburg, S.C. As part of a $46 million settlement in two class-action discrimination suits last year, the $1.5 billion chain signed a fair share agreement with the NAACP promising to boost minority participation in ownership, management, marketing and purchasing (see "More Than Just Window Dressing?" September 1994).

Within the franchisee ranks, minorities and women have come further along than most people think, counters Jeanne D. Hitchcock. She is manager of urban affairs at Dallas-based Southland Corp. (owner of 7-Eleven convenience stores) and chairperson of the Women in Franchising Committee at the International Franchise Association (IFA) in Washington. "We have made significant, but incremental gains," adds Hitchcock. "To think that we are going to move forward explosively isn't realistic."

As minorities continue to fight for a bigger share of the $970 billion franchise industry, a new battle plan calls for greater community involvement. Some financial institutions, such as Bankers Trust in New York, are already teaming up with community development corporations to bring more franchise outlets to urban areas and recruit minorities to run them.