“Existing racial differences in wealth go the full distance in explaining racial differences in self-employment,” says William Darity, a professor of African-American studies, public policy and economics at Duke University. “If we’re really concerned about the self-employment gap in the United States, or the franchise participation gap more narrowly, we have to address racial differences in wealth.”
For Karim Webb, who owns two Buffalo Wild Wings franchises in Los Angeles, wealth was never a problem. Webb’s parents and sister own 15 McDonald’s franchises and, after graduating from Morehouse, he saw no reason to bother with business school.
“You know, when your parents are entrepreneurs, you kind of grow up around the table, and that is your MBA,” he said. Webb applied for financing during the recession and was turned down by banks, but with the help of his business partner, he was able to attract “high net worth individuals” to help invest the $2 million needed for each restaurant.
On a recent Friday, his Baldwin Hills restaurant was packed with people who crowded at the bar to watch a basketball game and families who’d stopped in for dinner. Webb says he’d like to see more minorities in franchising. He’s aware of the racial wealth gap and the difficulties that minorities face when applying for bank loans.
He also thinks they face an additional hurdle—one that occurred to him while he was talking to a corporate counterpart at a Buffalo Wild Wings convention.
Webb says he had “an epiphany” as his colleague explained that he was having trouble finding African-American and Latino managers.
“I was flabbergasted,” Webb said, “because he didn’t realize those people already worked in his restaurant.”
That conversation inspired him to act and Webb now meets regularly with aspiring minority entrepreneurs who have seen his success and seek to emulate it. He invites them to his restaurant and asks them to defend their business plans. He says he’s on the lookout for new talent in which to invest.
“Hopefully in 10 years, I’ll be in a position to diversify my portfolio,” Webb says, “and I’ll be looking for a plethora of opportunities to park some money.”
(For more stories from the Marketplace Wealth and Poverty go to http://www.marketplace.org/wealth-poverty)
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