Accessing New Markets with the National Congress for Community Economic Development.

Community Development Centers (CDCs) can open doors, help partners leverage assets and serve as potential partners for the franchising sector.

The International Franchise Association (IFA) has an ongoing friend in accessing new markets in the inner city and rural areas: The National Congress for Community Economic Development (NCCED), a Washington, D.C.-based trade association that for the past 30 years has represented community development corporations (CDCs). There are nearly 4,000 non-profit CDCs that serve low-income areas by providing affordable housing, commercial revitalization, business development, and social services. Each CDC represents, on average, about 20,000 residents--a market of 75 million people in the United States.

Often overlooked, these communities are filled with great opportunities for franchise growth. The U.S. Department of Housing and Urban Development (HUD) estimated in 1999 that there is a $350 billion purchasing gap in inner city locations just in food and apparel alone. That's a lot of customers shopping outside their neighborhoods with discretionary income that is not being served close to home.

CDCs can help their business partners leverage assets in underserved communities to maximize their own competitive advantage. In addition to unmet consumer power, these assets include central location, transportation hubs, labor, cheaper land and retail square footage, tax benefits, and other incentives. CDCs often own shopping centers and valuable retail space. They are involved in commercial revitalization, build low and moderate-income housing, and provide many other social and economic development services. CDCs are allied with city and county governments, state programs, and federal agencies. They serve local small businesses and have the respect of local citizens. And CDCs often work with banks and quasi-public finance agencies to create affordable streams of working capital.

Community development corporations are great potential partners for the franchise sector. So smart retailers are moving in.

Many franchisors are already there with special programs like the "BUILD" program of Blimpie's, which Lance Moore described at a session I moderated on urban opportunities at the IFA annual convention in Las Vegas. Moore described all the reasons and advantages of Blimpies' inner-city program and brought a new franchisee from Detroit, Harrian Clarke, and a partner from the U.S. Small Business Administration, Senior Mgr. of Empowerment Zones/Enterprise Committees Constance Payne-Logan, who helped put the deal together.

Other recent franchise deals that have involved CDCs include a Sterling Optical in Harlem, an Athlete's Foot store in Washington's Anacostia neighborhood, and a Sign-A-Rama in South Chicago. While being honored by IFA members in Las Vegas, franchisee Calvin Johnson described his own story with Athlete's Foot, Timberland and Choice Hotels, and how East of the River CDC in Anacostia was pivotal in helping launch his own growing enterprise by assisting him in locating the business, obtaining financing and providing ongoing business management assistance. And now Johnson is seeking CDC relationships wherever he locates his new enterprises.

IFA and NCCED have enjoyed a fruitful strategic relationship over the past two years including conference exchange, Web site hot links, trade show appearances, and direct technical assistance for franchisors looking to locate in specific areas, such as empowerment zones or enterprise communities. IFA President Don DeBolt serves on the Advisory Board of NCCED's Corporate Partnership Program, funded as part of the Ford Foundation's Corporate Involvement Initiative. The intent of these efforts is to link companies and community-based efforts in business-case, market driven ventures that are truly "win-win" relationships. Alliances such as IFA's with NCCED are popping up all over the country as companies identify the competitive advantages of working with community-based development organizations as they seek new customers, locations, labor and capital.

The recently passed "New Markets" legislation provides even more incentive for investing in inner-city locations, including attractive new investment tax credits, venture capital, business technical assistance and other benefits.- IFA and NCCED are working hard to bring these opportunities to our respective memberships. Stay tuned.

NCCED looks forward to hosting an IFA trade delegation in Pittsburgh on October 20 held in conjunction with our annual meeting. That is a great time to meet CDCs from around the country and get all the updates on the exciting emerging new market right here in our backyard. Franchisors are welcome as exhibitors, panelists, and members.

John Nelson is director of corporate partnerships at the National Congress for Community Economic Development. He can be reached at 877-44-NCCED.