Why Aren't There More Hispanics in Franchising?

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NEW YORK ( TheStreet) -- Here's a mystery.

According to the 2010 Census, of the 308.7 million people in the United States, 16% are of Hispanic or Latino origin. Hispanics accounted for 29% of the population in the West.

Hispanic spending power was estimated at $1.2 trillion last year by HispanTelligence, and by the end of this year, Hispanic spending power is expected to be more than 15% of total spending for the entire U.S. -- not including undocumented immigrants, according to the International Franchise Association .

Yet as of 2007 just 5.2% of all U.S. franchises were owned by Hispanic franchisees, the IFA said in December, citing the U.S. Census. Today that could be up to 10%, says Jose Torres, principal partner and founder of BuscaTuFranquicia.com and its English counterpart, Franchise4Hispanics.com, virtual marketplaces that connect Hispanic franchisees and franchisors.

"The interest from the franchisee side has moved up significantly," says Torres, the author of the IFA article. There is "much more interest, much more requests for information, much more calls from those who want to find about more about their franchise opportunities."

More Hispanic-run franchises means more access to the Hispanic community. With so much money at stake and so much interest, why aren't there more Hispanic franchisees?

"Despite all these great demographics, there is still a tremendous lack of awareness and commitment to go after this market from a consumer level , and that influences franchisees," Torres says. "When a franchisee sees that an industry is not really going after them -- Hispanics work on trust a lot -- that really makes an impact with the group. Aspiring franchisees respond much stronger and better to those franchisors that they feel are Hispanic friendly."

The IFA is also working with the U.S. Hispanic Chamber of Commerce to build relationships between franchisors and Hispanic communities, says Matthew Haller, an IFA spokesman. "The population has been growing. As those populations have grown, franchisors have recognized and developed programs to target Hispanics to come to their systems. You have a lot of great brands growing in the South and West," he says.

But there is still a lack of awareness on the part of franchisors.

Torres points to a low headcount in many franchisors' management and executive teams. "In general that is the handicap. When you don't have inside your company a workforce that can identify with that at the executive or management level it's tough to go after it," he says.

Guillermo Perales, the largest Latino franchisee and CEO of Sun Holdings , owner of nearly 400 franchises in the Dallas-Fort Worth area, including Arby's, Popeye's, Golden Corral , Burger King (BKC) , CiCi's and Del Taco , says more franchisors need to incentivize their teams to bring on Hispanic franchisees.