Minding the Culture Gap

Why do women, people of color, and young people get rejected for loans when they try to buy a franchise? The brand Junk Chuckers tried to solve the problem and now every applicant gets approved. Here's what they did.

- KIM KAVIN

Bedel Mbaya speaks six languages: English, Spanish, French, Swahili, Portuguese, and Lingala. But for some reason, he couldn't seem to communicate with bankers. In early 2021, he was a 27-year-old carpenter with a history of hard work, and he needed $45,000 for a franchise fee with the trash-hauling company Junk Chuckers. He fulfilled all the requirements on paper for a loan, had the support of Junk Chuckers, and was dedicated to becoming an entrepreneur.

Yet at least four times, the banks rejected him. They gave no explanation, but he was pretty sure he knew their reasons.

"I thought it was my race and age," says Mbaya, who speaks with a Congolese accent. "I would try to speak slow, but what was going through my head was that they couldn't understand me."

In this, Mbaya was hardly alone. The IFA Foundation, which is the nonprofit partner of the International Franchise Association, describes this kind of problem as "omnipresent": Women, people of color, and prospective franchisees under the age of 30 all regularly struggle to gain access to capital. It's a common subject in franchising circles, and franchise leaders get an earful about it from lawmakers in Washington, D.C., particularly those who are members of the Congressional Black Caucus and live in primarily Black and Hispanic districts.

"They always say they're hearing from their constituents that they have a hard time getting capital," says Rikki Amos, executive director of the IFA Foundation.