Franchise Ownership for Black Entrepreneurs

How can you get funding to buy a franchise?

Funding is the natural place to start, because the money you can put in and borrow sets the range of franchises you can realistically consider. The Federal Reserve Banks’ 2025 Small Business Credit Survey gives useful context on access to financing. In 2025, 41% of Black-owned employer firms in the survey applied for new financing such as a loan, line of credit or merchant cash advance (Federal Reserve Banks, 2026), and 32% of those applicants were approved for the full amount they sought (Federal Reserve Banks, 2026). The survey covers existing employer businesses and is not a random sample, so it cannot predict how your own application will go, but it shows why a financing plan that does not depend on one lender approving the full request is worth building before you settle on a business.

Before you talk seriously with franchisors, a few preparations will make that plan concrete.

• Review your credit reports, savings, debts and monthly obligations so you know your starting point before a lender does, and ask lenders early what they would need to see.
• Try FranNet’s funding options calculator as you plan.
• Read about the SBA’s 7(a) loan program and ask lenders who offer 7(a) loans how the program would apply to the kind of franchise you are considering.
• Ask each franchisor for its total estimated investment and the cash it expects owners to bring, since those figures set the size of the plan you need.

Do franchisors offer diversity incentives or reduced franchise fees?

Individual franchise systems set their own policies, so the only reliable answer comes from each franchisor. Ask directly about any incentive, the conditions attached to it and how long it lasts, and get the terms in writing before you count it in your budget.

What about grants for Black-owned businesses?

If you come across grants for Black-owned businesses, confirm the details, deadlines and eligibility rules with the organization that runs the grant, and make sure your financing plan still works if the grant does not come through.

What is the IFA Black Franchise Leadership Council?

The International Franchise Association’s Black Franchise Leadership Council was created in 2021 to help increase business ownership among Black families and communities (International Franchise Association, 2025). The council focuses on education and access to capital, and its programs include outreach to historically Black colleges and universities so that students can see franchising as a potential career choice. You can follow its programs as you research, and when you talk with franchisors, it is fair to ask whether they take part in the council’s work and what that involvement includes.

How do you match a franchise to the experience you already have?

The best match for you depends on the skills you bring, the investment you are comfortable with, the hours you want to put in and how much of the daily work you want to handle yourself. Business-to-business franchises, which serve other companies, can suit you if your strengths are in sales, account management or operations. Experience running crews, projects or field teams, where you are used to scheduling work, checking quality and keeping customers happy, may make home services franchises a good place to look. A background in teaching, coaching or training could point you toward education franchises, while a career in nursing, caregiving or social services is experience you might put to work in senior care franchises.

You may also be starting your first business of any kind. The Kauffman Foundation’s national report on early-stage entrepreneurship found that people identifying as Black or African American had the largest increase in the rate of new entrepreneurs of any racial or ethnic group, from 0.35% in 2024 to 0.45% in 2025 (Kauffman Foundation, 2026). That 2025 rate was nearly double the 0.24% recorded in 2019 (Kauffman Foundation, 2026). When you are starting something new, it makes sense to compare franchising with building an independent business before you choose either path, and our page for first-time business owners explains what a franchise system gives a beginner and what it does not.

How can you find Black franchise owners and mentors to talk to?

Conversations with people who have already made this decision can answer questions that research alone cannot. Inside any system you consider, ask the franchisor for contact details of current owners you can call, and ask if it can connect you with Black franchise owners in the system. Those calls are where you learn how training worked in practice, how responsive the support team is and what an ordinary week looks like.

For general business guidance, SCORE offers free mentoring, and a mentor can be a steady sounding board while you test your plans and your budget. Our page for minority entrepreneurs points to resources for owners from a wider range of backgrounds.

Where does a FranNet consultant fit alongside your lender and mentors?

Your lender, your mentors and the owners you call each help with part of this decision. A FranNet consultant is a local franchise expert who advises you on franchise and business opportunities, and your consultant can educate you about franchising, help you research businesses, identify the structure and mix of businesses that interest you and introduce you to franchisors that fit your model. Because one consultant can introduce you to many different franchisors, you can learn about several options in one place instead of going from company to company, and your consultant can tell you which franchises are currently available in your area. The franchise ownership assessment and our overview of how buying a franchise works are good places to start before that first conversation.

Working with a consultant is at no cost to you and with no obligation. Similar to a real estate agent paid by the seller, FranNet receives its fee from the franchisor of the franchise you may buy. Your consultant guides you from the first research through to signing the franchise agreement, and the decision to sign is always yours. As our client bill of rights states, FranNet consultants will not pressure you or talk you into an opportunity that does not fit your goals, budget or skill set. When you are ready, you can tell us a bit about your goals and a local consultant will reach out to talk through your options.