LOUISVILLE, Ky. (WDRB) – Louisville-based Yum! Brands will give $3.5 million to the University of Louisville over five years to establish a “Global Center of Franchise Excellence” at U of L’s College of Business.
The move allows U of L to further carve a niche in academic programming centered on the franchising business model, said Kathy Gosser, a former Yum! Brands executive who teaches franchising at U of L.
Franchising allows independent owners to use a business concept and general playbook developed by someone else.
For example, there are nearly 50,000 KFC, Pizza Hut, Taco Bell and Habit Burger Grill restaurants in 150 countries and territories, but almost none of them are owned by Yum! Brands. Instead, franchisees pay Yum! Brands royalties to operate restaurants under those brands.
U of L ramped up its academic programming around franchising in 2019, establishing a six-class graduate certificate program in franchise management. In 2020, the university created a six-week online “bootcamp” to learn the “core skills of franchise management.”
This is the first time U of L’s franchising curriculum has garnered outside support, Gosser said.
The endowment from Yum! Brands will allow U of L to hire a staff person for the center and to continue an undergraduate track in franchising within the bachelors of business administration degree, which began in the current academic semester, said Gosser, an executive-in-residence at U of L's business college.
The center will have a special focus on increasing the prevalence of “under-represented” groups such as people of color and women in the franchising industry, she said.
For Yum! Brands, the center will be an educational outlet for potential franchisees, their employees and corporate employees who might consider running their own restaurants, said Wanda Williams, Yum’s head of global franchising.
“We think it’s exactly what we need to really target new buyers, especially under-represented people of color and females, as well as high-potential team leaders at a restaurant level and employees who work at our corporate headquarters who are also interested in becoming owners,” Williams said.
Online programs such as the bootcamp will be available to Yum’s 2,000 franchisees around the world, Williams said.
The center will also fund research, Gosser said, on topics such as why there are few people of color and women in the franchising industry.
“What are the barriers that are holding folks back? Why can’t we have more under-represented populations in this great field?” Gosser said.
One obvious answer: money. Opening a KFC restaurant, for example, requires the potential franchisee to have a total net worth of $1.5 million and access to $750,000 in cash.
Gosser acknowledged that access to capital is a “barrier” to franchising, but she noted that restaurants aren’t the only industry with franchises.
U of L’s curriculum applies to the gamut of franchised businesses, from gyms to printing stores to automotive service. Gosser said some franchises, such as a cleaning business, can be started for $10,000.
“That’s a pretty reasonable amount to get started in a franchise and grow it,” she said.
About 7.5 million people are employed by the more than 750,000 franchised businesses in the United States, according to the International Franchise Association.
Gosser added that potential business owners aren’t the only ones who will benefit from U of L’s programs, which will also be applicable to employees of franchisees and franchisors.
Yum’s Williams said money is not the only reason more people aren’t part of the franchising industry. It also has to do with education, which the U of L center will provide.
“What we need to make sure everybody understands, including under-represented people of color and females, is how to successfully run an independent franchise business,” she said. “…We can teach you how to make pizza or tacos or burgers or chicken. But we want to make sure that everybody has the right tools at their disposal to ensure they can run a successful business.”
While other universities have franchising courses, U of L’s center will be unique among large, public universities, Gosser said.
The International Franchising Association, which helps U of L develop its curriculum, was unable to say how many universities have franchising programs. U of L's is one of "a small but growing number of university programs," according to the trade group.
"(W)e are excited to both see and support a growing focus on educating about the franchise business model through our nation’s academic institutions," said Rikki Amos, executive director of the IFA Foundation and the Institute of Certified Franchise Executives, said in an email.
Correction: A previous version of this story misstated Yum's number of restaurants.