DIVERSITYREPORT

and CASE STUDIES

RESEARCH REPORT AND CASE STUDIES
Published by
Sponsored by
Project Coordinator and Editor
Richard Willard
President
Management Resources International
Copyright2003 IFA Educational Foundation. All rights reserved.
IFA EDUCATIONAL FOUNDATION
DIVERSITY REPORT AND CASE STUDIES 2
List of Participating Companies ................................2
Acknowledgments....................................................3
Introduction..............................................................4
Summary Findings....................................................5
Examples & Case Studies..........................................5
AFC Enterprises..................................................8
Choice Hotels..................................................11
Dennys ..........................................................14
Dominos Pizza................................................18
LIST OF PARTICIPATING COMPANIES
AFC Enterprises
Choice Hotels
Dennys
Dominos Pizza
The IFA Educational Foundation expresses its sincere thanks to these
IFA member companies for participating in the study.
TABLE OF CONTENTS
DIVERSITY REPORT AND CASE STUDIES 3
Diversity Report and Case Studies
L
ast summer the IFA Educational Foundation conducted a study of a broad cross-section of IFA member
franchise systems to identify companies with formalized diversity programs. Specifically, the
Foundation sought to identify companies with a strategic plan incorporating diversity issues in the
workplace and marketplace, with specific minority outreach programs, advertising and marketing
programs targeted to minority groups, and formal diversity training programs for their employees and
franchisees. The Foundation then retained Richard Willard, president of Management Resources
International, to develop case studies of companies with best practices in these specific areas. This report
is the result of the research work and interviews conducted by Mr. Willard with the companies that volun-
teered to participate in the study.
On behalf of the Foundations Board of Trustees, we would like to express our appreciation to Mr. Willard
and to the companies and their executives who participated in the study. Four companies were selected
for the study and we offer special thanks to Ellen Hartman, AFC Enterprises, Tom Mirgon and Maria
DAmbrosio, Choice Hotels International, Rachelle Hood-Phillips, Dennys Corporation, and Jim Betts,
Dominos Pizza, LLC.
We would also like to recognize and thank the Coca-Cola Company for their continued support of the
Foundations Diversity program. Thanks to their generous financial support, the Foundation provides on-
line training programs, regional seminar programs, manuals and training materials for franchise systems
looking to develop a diversity program or to expand and improve their current programs. We strongly
encourage IFA members to take advantage of the on-line courses, which are available from our website,
www.IFA-University.com, or to signup for the regional seminar programs conducted by Mauricio
Velasquez, president of the Diversity Training Group one of the countrys leading experts on diversity
issues.
As Mr. Willard points out in this study, diversity is all about opportunities opportunities to capture more
business, opportunities to bring more talented people with diverse backgrounds and different ideas into
our workplaces, opportunities to expand and enrich our personal lives, our businesses and our communi-
ties.
This report demonstrates that those companies that have made it their business to embrace diversity have
made their businesses more profitable and more successful. We encourage IFA members to study their
examples and to learn from them to take advantage of these opportunities.
Sincerely,
Sidney J. Feltenstein
Chairman
IFA Educational Foundation
Chairman and CEO
Long John Silver's/A&W Restaurants
DIVERSITY REPORT AND CASE STUDIES 4
O
ver the past decade, the United States has witnessed
major changes in the composition of its workforce,
marketplace and customer base. The country as a whole has
become more diverse in terms of population. According to
the 2000 U.S. Census:
The population growth of 32.7 million people between
1990 and 2000 represents the largest census-to-census
increase in American history;
The growth rates for the Hispanic, African-American and
Asian segments of the population continues to outstrip
the growth of all other segments, with Hispanics and
Asians recording the highest percentage increases;
By the year 2005, 85% of those entering the workforce
will be women, people of color, and immigrants;
The number of people age 65 or older increased by 12%
to 35 million, although their percentage of the total
population declined slightly; and
People with disabilities make up 20% of the population.
In response to these and other changes, many IFA members
have developed a variety of diversity strategies and programs
that respond to a more diverse business environment and
marketplace. With the assistance of the Coca-Cola
Company, the IFA Educational Foundation undertook a study
of IFA members to identify their various diversity programs,
and developed this series of case studies that profile selected
companies. The case studies include the respective compa-
nies approach to diversity, an outline of their programs, and
any outside resources that management found helpful in
crafting their diversity strategies.
Race
In Census 2000, 281.4 million people were counted, a
13.2% increase from the 1990 Census. Major race break-
downs and changes since 1990 were as follows:
216.9 million were "White", an increase of 5.9-8.6%
35.3 million were "Hispanic", an increase of 57.9 %
34.7 million were "Black" or African American, an
increase of 15.6-21.5%
10.2 million were "Asian," an increase of 48-72%
Gender
Females outnumber males by 6 million.
1 in every 2 women was married and lived with a
spouse; 1 in 4 was a college graduate; and 1 in 7
worked in an executive, administrative or managerial
capacity.
Between 1989-1995, women accounted for 85% of
the total increase in the number of workers with more
than one job.
Disabilities, Age & Sexual Orientation
People with disabilities make up 20% of the popula-
tion in 2000.
Two-thirds of Americans who live to age 65 are alive
today; and they outnumber those age 25 and
younger.
The average 55-year old is expected to live to age 83.
The generation of people born after 1964 will spend
more on caring for aging relatives than for their
children.
An estimated 15-20 million people are gays and
lesbians.
Other Trends
By the year 2005, 85% of those entering the
workforce will be women, people of color, and
immigrants.
By 2013, the Hispanic population will surpass the
African-American population
The number of elderly will double in the space of
one generation.
INTRODUCTION
2000 U.S. Census Highlights
Source: U.S. Census. Percentage ranges under Race above are due to a change in the 2000
Census that recorded, for example, "Asian" and "Asian and other race".
Motivation
Diversity strategies and programs were developed in
response to changes in the workforce and marketplace. The
case studies demonstrate how companies modified their
business models, strategies and practices to take advantage
of these demographic changes. Diversity awareness is one of
the most critical challenges faced by the business commu-
nity, and impacts every aspect of the business from strategic
planning to marketing and customer service. Companies that
have successfully created a more inclusive workplace, and
that understand the differences among different customer
segments and tailor their marketing strategies accordingly,
can expand their customer base and create greater brand
identification and customer loyalty.
When we first began our diversity initiatives, reports
Dennys Chief Diversity Officer Rachelle (Ray) Hood-Phillips,
we conducted an attitude and usage study and found that
the company was loosing some $100 million per year in
potential sales by ignoring the African-American consumer.
That was a real wake up call to senior management.
Its not just an issue of representation, says AFC Enterprise
Vice President Ellen Hartman, Corporate America is missing
the boat when it comes to diversity. Its not just a one-time
shot, but a continuous journey. Companies need to learn
how to use diversity to their advantage by creating and
seeking out opportunities, and continuously nurturing them
through dialogue and professional development.
For Dominos, reports Senior Director of Diversity Jim
Betts, the issue we faced was understanding that we have
this emerging majority, both as employees and as customers.
How do you create an organization that is reflective of the
community, but is also inclusive in nature and at the same
time is working with the under-served and the under-devel-
oped? When it comes to diversity, its no longer business as
usual youre either in it, or youre out of the game!
One of the biggest challenges, continues Betts, was
educating our own people on the breadth of diversity its
not just a race issue. People need to get beyond that and
understand diversity and how it impacts our business and
them as employees. A company should be representative of
its customer base.
Leadership
Diversity strategies tend to fail unless they are driven and
supported by senior management. They should initiate with
the CEO and senior management, and extend to every
employee, policy and practice of the business. Diversity strate-
gies need to be articulated with clear goals and objectives. The
results need to be measured and reported back to senior
management, and there must be accountability at all levels.
We have a management committee of 14 persons, 33% of
whom are minorities, reports Dennys Hood-Phillips. In
reforming the company, we made a conscious effort to
ensure that there was diversity in the top ranks of the
company. From there it just cascades down throughout the
rest of the company. But it has to start at the top!
Senior management, reports Choice Hotels Corporate
Engagement Specialist Maria DAmbrosio, is very active in
our diversity efforts. They receive regular reports on diversity
considerations and progress in all five facets of our business.
We have established a diversity committee of our board of
directors.
It must start at the very top, advises AFC Enterprises
Hartman, where it is a core issue with our chairman. At
AFC it is everyones responsibility to put diversity initiatives
into action.
Analysis & Employee Buy In
Diversity strategies cannot be developed in a vacuum. They
should be developed based on an initial internal analysis of
the company and an external analysis of the marketplace. The
internal analysis should include an assessment of how diver-
sity considerations are reflected and interpreted among the
existing employees what are the values and purpose of your
company and are they shared by your employees and suppli-
ers , and a review of company systems, policies, practices
and processes to eliminate those that impede inclusion.
In the case of Dominos, the company used the Dennison
Culture Survey. Based on the Survey, reports Betts, we
focused our initial efforts on where we had scored the
lowest. We also used the Survey results and feedback from
the focus groups and interviews to design our diversity-train-
ing program. Once measures were put in place like focusing
DIVERSITY REPORT AND CASE STUDIES 5
SUMMARY FINDINGS
In the course of the interviews that led to the development of the case studies, a number of common
themes emerged as companies sought to develop their diversity strategies.
on gender and pay, recruitment and turn over and
measuring these there was a better appreciation. Its a
more formal approach, and its changing the company.
The external analysis includes an assessment of demographic
changes to determine the size of the market and its potential
growth rate, and understanding the unique characteristics of
your customers and prospects. It also includes an analysis of
what your competitors are doing to tap into market segments.
This helps to make the business case on why diversity is impor-
tant to your business and your employees future, and it links
that effort to the companys mission, vision, and core values.
To facilitate employee buy in, many companies have estab-
lished a Diversity Steering Committee, representing all levels
of the organization, to help guide the development, imple-
mentation and monitoring of the diversity plan.
We have 27 people who represent all areas of the organiza-
tion, continues Dominos Betts. In implementing these
objectives, we measure very specific areas such as represen-
tation, gender-pay equity, just to name a couple. We track
the opportunities for employment and make sure we have a
full slate of candidates to choose from. Weve since added
two more objectives that address our minority franchise
group and our vendor/supplier program.
To successfully get the ball rolling, AFC Enterprises Hartman
offers the following advice: First, gain absolute buy-in from
the chairman and top management, then hire an experienced
diversity consultant who can come in and do a cultural
assessment of the company, then write up a business case
study on how diversity can contribute to the companys
bottom line. Next, bring in your core group from finance,
procurement, human resources, etc. and get their buy-in
and input. Next comes the training component that is
specific to each companys identified needs, while manage-
ment seeks to identify and change structural impediments
within the company, and identify issues that impede an
inclusive approach. For example, lets say a company,
consisting of predominantly white males, has a referral
program to attract new employees. This program impedes
inclusion because people usually hire people that look
similar to them.
Diversity Strategic Plan Development
The diversity plan describes how a company will deploy its
resources to implement and execute it diversity activities. It
includes those things that will be done to create and promote
a more inclusive workplace, and what actions will be taken
to execute a diversity strategy in the marketplace. The plan
calls on each business unit to capitalize on the growth and
profit opportunities inherent in population demographics and
market trends.
Choice Hotels overall approach to diversity means reflect-
ing the communities where we work and do business
reports Choice Hotels DAmbrosio. Diversity considera-
tions are intertwined in all five facets of our business. In
franchise ownership, we seek to reach out to minorities
through our Exploring the Potential of Franchisingeducation
program and our Minority Developer Incentive. In the
employment area, we work with minority-focused search
firms and provide diversity training. For supplier diversity,
were focusing on widening and broadening the network of
minority vendors. In marketing and advertising, weve
increased spending on minority media and our approaches to
niche markets. And our charitable giving seeks to give back to
the communities where our associates live and work.
Sample areas that the Diversity Strategic Plan might address
include the following:
Workforce Preparation & Development
Job Training and Career Development
Internships and Scholarships
Recruitment, Hiring, Retention/Professional
Development and Promotion
Work/Life Programs
Diversity and Sexual Harassment Prevention Training
Investor and Community Economic Development
Increased Investments and Partnerships in Women- and
Minority-Owned Financial Institutions
Increased Involvement in Community Investment Programs
Develop Financial Support Mechanisms for New
Minority Franchisees
Procurement and Supplier Diversity
Systematic Increase in Vendor Relationships for Goods and
Services with Women- and Minority-Owned Businesses
Encourage Major Suppliers to Develop Similar Minority
Supplier Programs for their Major Subcontractors
Community Outreach
Media and Public Relations
Advertising and Employee Communications
Minority-Owned Search Firms
Sponsorships
Philanthropic Programs
Diversity Marketing
There is a need for the business community to change its
marketing strategies to more effectively appeal to this chang-
ing demographic landscape. A decade ago, the marketing
trend was to adapt advertising and promotions along cultural
or ethnic lines, and roll them out in targeted communities
and market segments. Today, ethnic groups are now predom-
inant in major cities throughout the United States, calling for
a more broadly based strategy targeting all groups.
One of our primary objectives, continues Dominos Betts,
is to grow our franchise and store market. We understand
that there are areas under developed and markets under
served, and we are focusing on growing those markets
through our minority franchise group. From a marketing
perspective, were taking a multi-cultural approach with our
general market marketing and a targeted approach with the
Hispanic market.
DIVERSITY REPORT AND CASE STUDIES 6
DIVERSITY REPORT AND CASE STUDIES 7
Find a market niche or segment, study its unique charac-
teristics, and then design your product or service to
appeal to those characteristics.
Try to adapt the market to fit your product or service.
(Build it and they will come.)
Be proactive; anticipate your customers needs, build-in
ways to get customer feedback and use this information
to better tailor your product and service to your
customers.
Continue to offer your product or service using the same
methods and strategies for all market segments. (Shotgun
approach.)
Be entrepreneurialexplore new markets and be the first
to enter new markets. Diversify your marketing
campaigns, products and services, to meet new popula-
tion segments as they are emerging. Establish brand
loyalty early among these groups for a strong competitive
position.
Continue to market to the same segments even while
demographic reports show that these groups are declin-
ing in number.
Emphasize customer research and customer orientation
in research and development.
Over-emphasize new product design and frills that
have not been tested nor based on customer research.
Make sure all the facets of your marketing program all
facets of your business are integrated around greater
awareness of your customer. All aspects include advertis-
ing, public relations, direct mail, Internet, newsletters,
sales force, customer service, benefit statements,
image/brand management, and corporate policies.
Make diversity marketing a special function in one part
of your business, with no connection or relationship to
everything else that you are doing.
Source: IFA Foundation Diversity Training Course on Marketplace
Fundamentals
Diversity Training
Companies that have successfully developed and imple-
mented diversity strategies have also developed
diversity-training programs for their employees. All of the
training programs surveyed in this report where developed
with employee research and input, and are implemented
using a combination of internal and external resources.
Peoples diverse backgrounds can sometimes be an obsta-
cle to being the best you can, reports Dominos Betts, so
our diversity training focuses on the so called isms. People
are all different, but all bring value to the workplace. This
needs to be both understood and appreciated.
At AFC Enterprises, reports Hartman, training is provided
through a combination of internal staff and an outside
vendor, and is aimed at the director- level and above.
Attendance at training sessions is mandatory, and uses a
combination of lectures, written materials, audio-visual
presentations and group discussion. AFC also conducts a
series of post-training dialogue sessions at various levels of
management to discuss diversity related issues and provide
feedback. Our future plans, continues Hartman, include
continued use of the Perception Surveys with an improved
version that is research-based; expansion of the dialogue
sessions to all levels within the company; and support to
AFC franchisees in the development of diversity training at
the local franchise level.
We have two basic programs, reports Choice Hotels
DAmbrosio. The first is for all employees, and involves a
common ground understanding of diversity. This occurs
once a year, and is outsourced to a local college or univer-
sity. The second program is for management-level
employees. A part of a management-training course is
dedicated to managing a diverse group of employees. This
course is given six times a year, and was specially designed
by Choices Educational Services Department.
For many years, Dennys has offered its We CAN! diversity
training program, and continues to refine the diversity train-
ing processes to ensure that its commitment to the message
of diversity is maintained and communicated throughout the
organization. For example, reports Hood-Phillips, we
have an in-house cadre of Trainer-of-Trainers who conduct
much of our diversity training. As part of their training, all
have gone to the National Civil Rights Museum to help them
gain a broader perspective on diversity and what it means to
this country as a whole.
We invite you to explore these issues more in-depth in the
accompanying individual case studies. A special thanks to
Mauricio Velasquez, the President of the Diversity Training
Group, who assisted the IFA Educational Foundation in the
development of its four courses on diversity, elements of
which are incorporated in this summary.
Diversity Marketing Dos and Donts
DO DONT
DIVERSITY REPORT AND CASE STUDIES 8
Summary Description
AFC Enterprises New Age of Opportunitydiversity manage-
ment program is based on the commitment that the inclusion
and equality of opportunity allows the best talent to surface
and gives everyone the chance to set and pursue their own
goals in an open, real world environment. The New Age of
Opportunityinitiative provides the framework for turning
goodwill into good business by focusing on four areas:
1) expanding franchise ownership opportunities for minori-
ties and women
2) cultivating new supplier relationships for minorities and
women
3) attracting and developing outstanding employees
4) enhancing the quality of life for people through
meaningful community service
The program was initiated in 1993 by Frank Belatti, AFC
Enterprises Chairman and Chief Executive Officer, who
founded AFC Enterprises based on two, co-equal core
principles of 1) building financial equity and 2) building
social equity.
I believe we can shape a company that celebrates
diversity and individual entrepreneurship and
shares its success generously. AFC isnt just accepting
diversity; were embracing and promoting it. More
than that, were learning how to apply our diversity in
a real way through the New Age of Opportunity
initiative, to achieve real success.
Frank Belatti AFC Enterprises Chairman
and Chief Executive Officer
Primary Contact Person
Ellen Hartman, Vice President
AFC Enterprises
Six Concourse Parkway, Suite 1700
Atlanta, GA 30328-5352
Tel: (770) 353-3152
Fax: (770) 353-3286
E-mail: [email protected]
Companys Overall Approach to Diversity
In 1994, AFC launched the New Age of Opportunity, a
corporate program based on the conviction that inclusion and
equal opportunity allow ambitious, talented people to
emerge, prosper and pursue their dreams. The program
includes initiatives to recruit minority and women franchisees
and suppliers, increase employee career growth and develop-
ment, and perform meaningful community service.
AFCs mission is to Create Equity through Opportunity, defin-
ing equity in two ways. First, there is financial equity
achieved by increased earnings. The company creates finan-
cial equity as it grows, helping team members become
managers and helping managers to become franchisees.
Second is social equity. It starts with the recognition that
each individual, each culture, and every personal history is
different. AFC honors that diversity by investing time and
attention in creating opportunities for its people to meet new
challenges and make valuable contributions. The company
espouses four simple values:
Be a Leader - value people with the drive to find a better
way, and the courage to be an example in everything
they do.
Do the Right Thing- value people you can trust to
always make the best choice, not the easy one.
Make a Profit - value success as a business and expect it
to grow.
Have Fun- value enthusiasm, creativity and the ability
to enjoy work and the people you work with.
According to Ms. Hartman, AFC had been successful
because of diversity. Its much, much more for us than just
doing the right thing. Diversity is at the very core of our
business model and strategic plan. The New Age of
Opportunityinitiative was based on an analysis of who
were are core customers, and where were they located. It
was founded in the belief that our franchisees and manage-
ment should look like our customers. Diversity
considerations are reflected in all aspects of the companys
philosophy, strategic focus and marketing. Its not just an
issue of representation, says Hartman, Corporate America
is missing the boat when it comes to diversity. Its not just a
one-time shot, but a continuous journey. Companies need to
learn how to use diversity to their advantage by creating and
seeking out opportunities, and continuously nurturing them
through dialogue and professional development.
At first, continues Hartman, no one understood it. There
were no diversity programs or models back then (1993). This
was not a case of acting out of fear over a possible lawsuit.
AFC Enterprises Diversity Program Profile
Our greatest challenge was having all our audiences under-
stand it teaching inclusion of all diversity, and creating an
inclusive environment where everyone could celebrate diver-
sity. It must start at the very top where it is a core issue with
our chairman. At AFC it is everyones responsibility to put
diversity initiatives into action.
Beginning in 2002, AFC is focusing on a new effort to
become a world leader in social entrepreneurship. It seeks to
create an environment that fosters the growth of small
businesses, particularly in areas and among populations
historically under represented. It envisions an opportunity,
through its business, to help bridge the gap between the
world of entrepreneurs and the not-for-profit field of social
action and public policy. This opportunity occurs amid two
important global trends: the spread of free market economics
and widened political self-determination. At a time when
world peace will be intrinsically linked to advances in social
justice, AFC believes that social entrepreneurship can help
breakdown the volatile gap between the haves and the
have-nots.
Specific Diversity Activities
We believe we have an obligation to create economic
opportunity in the communities we serve. If we can
stimulate genuine economic expansion and opportu-
nity in a community, then in all likelihood we can
enhance our own position in that market and make
ourselves stronger in the process. To that end, we
manage this company under a philosophy that requires
us to ask ourselves constantly whether we are doing
the most effective job possible of deploying our corpo-
rate resources not only to generate a fair return on
current investments, but to create economic and
human opportunity in the markets we are privileged to
serve.
Frank Belatti AFC Enterprises Chairman
and Chief Executive Officer
Expanding Ownership and Opportunities
While many companies pronounce that they seek diverse
franchisees, AFCgains focus from its franchise partners,
including the ability to understand their business needs and
objectives; and to develop products, training, marketing
programs, technology, venues and concepts that generate
value for them. The company actively recruits and nurtures
women and minority candidates for its franchisees, and at all
levels of employment within the company. Women and
minorities make up 53 percent of its franchisees. Women and
minorities make up 40 percent of its Board of Directors and
36 percent of its senior management.
As part of it strategy to attract more women and minorities,
AFC actively attends minority trade shows, targets minority
publications, and advertises in minority media. The company
works with organizations such as the NAACP, the National
Urban League, the Black and Hispanic Congressional
caucuses, the U.S. Hispanic Chamber of Commerce,
Minority IFA Affairs Committee and the IFAs Womens
Franchise Committee to identify more opportunities and
those individuals with the talent to capitalize on those oppor-
tunities. Locally, the company is involved in business and
civic organizations where it can meet a wide spectrum of
todays and tomorrows entrepreneurs.
Supplier Relationships
AFC and its brands have sought to develop strong relation-
ships with diverse suppliers from banking and
construction to chicken and printing and have increased
expenditures with minority- and women-owned firms from
$250,000 in 1993 to over $23 million today. Diversity
considerations are a very important component of AFCs
procurement process, both for primary and secondary
vendors. The company also encourages its larger suppliers to
partner with, and mentor, minority small business providers,
and plans to expand this program in the future.
AFCs Supplier Development Program represents a commit-
ment to increase purchasing from minority and
women-owned businesses. Diversifying AFCs supplier
network has two prominent and powerful results. First, it
helps develop stronger lines of supply. Higher quality, lower
costs, innovative services, and improved reliability all add
value to AFC companies and restaurants. Moreover, as
minority and women-owned business grow in strength and
number, minority communities in general have more
purchasing power, which translates into stronger sales poten-
tial for all AFC restaurants.
AFC is also in contact with minority business enterprises that
serve aligned industries to see if they can effectively serve its
industry as well. AFC encourages its current suppliers to
track and report on their own purchases from minority and
female-owned businesses, just as the company tracks its own
such purchases.
Attracting and Developing Employees
While the New Age of Opportunityprogram makes good
business sense, at its heart it is about people, and ensuring
that all the people involved in AFCs success have the oppor-
tunity to grow, develop personally and professionally and
share the rewards of hard work and ambition. Women and
minorities make up to 36% of its key senior management
positions, and hold such titles as President, Chief Financial
Officer and Vice Presidents. The company has also been the
recipient of many awards recognizing its commitment to
diversity in the work place.
Community Relations
The spirit of volunteerism runs deep at AFC. The company is
committed to giving back to the communities in which it
does business by playing an active role in the neighborhoods
where its restaurants are located. AFCs community giving is
focused on housing, youth and education. More than just
providing scholarships and funding to community groups,
AFC, its franchisees and employees are active participants in
a broad range of programs and projects that promote diver-
sity in the communities they serve.
The company and its employees have build more than 300
DIVERSITY REPORT AND CASE STUDIES 9
homes in 12 countries on four continents for Habitat for
Humanity. The AFC Foundation has reinvested more than $2
million in the communities it serves. It strongly supports the
rights of all people, and cares about the children of the world
and the environment we share.
Diversity Measurement
AFC annually maintains statistics on minority representation
among its employees and franchisees, its primary and second-
ary vendors, the number of employees receiving diversity
training, number of diversity-related awards won, and the
number of lives impacted by its community outreach
programs. The company also conducts Perception Surveys
among its employees and franchisees to track its performance
and measure progress. These surveys play an important role in
planning future activities, and in modifying training curricula.
Diversity Training
AFC has had a formal diversity-training program in place for
the past 5 years, with training occurring every other year
over a 1-2 day period within the corporation. AFC does not
presently provide diversity training at the franchisee level.
Training is provided through a combination of internal staff
and an outside vendor, and is aimed at the director level and
above. Attendance at training sessions is mandatory, and uses
a combination of lectures, written materials, audio-visual
presentations and group discussion. AFC also conducts a
series of post-training dialogue sessions at various levels of
management to discuss diversity related issues and provide
feedback.
Future plans for diversity training include continued use of
the Perception Surveys with an improved version that is
research-based; expansion of the dialogue sessions to all
levels within the company; and support to AFC franchisees in
the development of diversity training at the local franchise
level.
Additional Resources
For those IFA members seeking to follow AFC example of
developing an inclusive approach to diversity, Ellen Hartman
offers the following advice. First, gain absolute buy-in from
the chairman and top management, then hire an experienced
diversity consultant who can come in and do a cultural
assessment of the company, then write up a business case
study on how diversity can contribute to the companys
bottom line. Next, bring in your core group from finance,
procurement, human resources, etc. and get their buy-in
and input. Next comes the training component that is
specific to each companys identified needs, while manage-
ment seeks to identify and change structural impediments
within the company, and identify issues that impede an
inclusive approach. For example, lets say a company,
consisting of predominantly white males, has a referral
program to attract new employees. This program impedes
inclusion because people usually hire people that look
similar to them.
In guidance to its employees and franchisees, AFC offers the
following advice to help promote its New Age of
Opportunityprogram.
For those with hiring responsibilities:
When interviewing, include at least three candidates that
are women or minorities.
Recruit through minority- and women-oriented media,
trade shows and organizations
Seek out and encourage diversity training for your
employees.
Organize dialogue sessions where employees can
discuss this subject and gain greater understanding and
appreciation about the unique characteristics diversity
brings.
Encourage management to nurture people with diverse
backgrounds to reduce turn over, increase productivity
and promote employee satisfaction.
For those with supplier relationship responsibilities:
When responsible for purchasing, include minority- and
women-owned suppliers in the selection process.
When possible, split orders so diverse suppliers can have
part of a larger job.
Approach larger suppliers about hiring minority- and
women-owned sub-suppliers for you job.
Secure lists and network with the minority development
groups.
Become involved with organizations such as the
Womens Foodservice Forum and the Multi-Cultural
Foodservice Hospitality Alliance.
Other useful resources include:
American Institute for Managing Diversity (AIMD)
Melanie Harrington, Executive Director
50 Hurt Plaza, Suite 1150
Atlanta, GA 30303
Tel: (404) 302-9226
[email protected]
Womens Foodservice Forum (WFF)
Michelle Miller
401 North Michigan Avenue, Suite 2200
Chicago, IL 60611
Tel: (312) 673-5701
[email protected]
MultiCultural Foodservice & Hospitality Alliance (MFHA)
Gerry Fernandez, President
65 Weybosset Street, Suite 60
Providence, RI 02903
Tel: (401) 751-8883
[email protected]
AFC Enterprises, Inc. is the franchisor and operator of 3,896
restaurants, bakeries and cafes in the United States, Puerto
Rico and 30 foreign countries under the brand names
Churchs Chicken, PopeyesChicken & Biscuits,
Cinnabon, Seattles Best Coffeeand Torrefazione Italia
Coffee and is included in the Russell 3000. AFCs primary
objective is to be the worlds Franchisor of Choiceby offer-
ing investment opportunities in highly recognizable brands
and exceptional franchisee support systems and services.
AFC Enterprises had system-wide sales of approximately $2.6
billion in 2001 and can be found on the World Wide Web at
DIVERSITY REPORT AND CASE STUDIES 10
11
www.afce.com.
Choice Hotels
DIVERSITY REPORT AND CASE STUDIES
Diversity Program Profile
Summary Description
Choice Hotels International has been focusing on diversifying
its organization for the past five years. The company strives
to create a more diverse organization in five facets of its
business franchise ownership, employment, supplier
diversity, advertising and marketing, and charitable giving.
Success in todays global business world will come to
those companies that recognize that embracing diver-
sity will open new doors of opportunity for all
involved. Diversity is the right course to pursue and it
makes good business sense.
Charles A. Ledsinger, Jr., President and
CEO of Choice Hotels International.
Key Contact Person
Tom Mirgon
Senior VP Administration
Choice Hotels International
10720 Columbia Pike
Silver Spring, MD 20901
Tel: (301)592-5127
Fax: (301)592-6127
Email: [email protected]
Maria DAmbrosio
Corporate Engagement Specialist
Choice Hotels International
10720 Columbia Pike
Silver Spring, MD 20901
Tel: (301) 592-6258
Fax: (301) 592-6200
E-mail: [email protected]
Companys Overall Approach to Diversity
According to Ms. DAmbrosio, Choice Hotels overall
approach to diversity means reflecting the communities where
we work and do business. Diversity considerations are inter-
twined in all five facets of our business. In franchise
ownership, we seek to reach out to minorities through our
Exploring the Potential of Franchisingeducation program and
our Minority Developer Incentive. In the employment area, we
work with minority-focused search firms and provide diversity
training. For supplier diversity, were focusing on widening
and broadening the network of minority vendors. In marketing
and advertising, weve increased spending on minority media
and our approaches to niche markets. And our charitable
giving seeks to give back to the communities where our
associates live and work.
Senior management, continues Ms. DAmbrosio, is very
active in our diversity efforts. They receive regular reports on
diversity considerations and progress in all five facets of our
business. We have established a diversity committee of our
board of directors.
Specific Diversity Activities
Expanding Ownership and Opportunities
Choice has a large percentage of minority ownership among
its franchises. Approximately 40% of all Choice properties are
owned by Asian-Americans. However, the company recog-
nizes that other minorities are under represented in hotel
ownership of its brands. To attract a more diverse population
of potential developers, Choice began a program in 2000 that
educates and attracts prospective minority franchisees. The
program, Exploring the Potential of Franchising, is presented
at minority conventions, Small Business Administration (SBA)
functions, and at educational settings such as Minority
Enterprise Development Week Conferences. The program is
offered across the United States. Sales personnel attend these
seminars along with instructors. The program is designed to
familiarize prospective franchisees with franchising in general,
and with hotel franchising and Choice Hotels in particular.
Topics covered include demographic trends that favor hotel
franchising, what to look at (and look out for) when evaluating
hotel opportunities, capital and operating costs, sources of
capital and financing, research tools, marketing strategies, cash
flow, construction, and royalty fees.
In July 2002, Choice introduced a Minority Developer
Incentive to encourage franchise sales to African-American,
Hispanic and Native American developers. The program seeks
to attract minority entrepreneurs who wish to build a Choice-
branded hotel, purchase an existing Choice-branded hotel or
convert an existing hotel to a Choice brand. Under the
program, Choice will provide $1,500 per room, up to
$200,000 per hotel, for development of mid-scale brand hotels
or $750 per room, up to $50,000, for development of
economy brand hotels. To be eligible for the incentive,
African-American, Hispanic and Native American owners
must hold a 51% ownership stake and meet all other franchise
criteria, with the allowance payable upon official opening of
the hotel. The funds are provided as an interest-free loan,
evidenced by a 10-year forgivable promissory note.
Forgiveness of the note is amortized over 10 years, providing
that the franchisee remains in good standing under its
franchise agreement.
According to Paul Sterbini, Vice President, Franchise
Development, This plan specifically aims to increase the
number of Choice franchisees among African-Americans,
Hispanics and Native Americans, three traditionally under-
represented groups in the hospitality industry. We want to
encourage their participation in hotel ownership and to intro-
duce them to the incredible opportunities that entrepreneurs in
our industry enjoy. This is a powerful opportunity to build a
business that can become a solid foundation for future growth
and success.
Choice also advertises franchise opportunities in key African-
American and Hispanic publications, such as Black Enterprise
and Hispanic Magazine. Sales personnel also recruit potential
franchisees at entrepreneur conferences sponsored by African-
American organizations such as NABHOOD and Black
Enterprise. Choices Advertising and Marketing Department has
consistently increased its budget for advertising with minority
owned media. Choice Hotels advertises to attract more guests
to its hotels and also advertises to attract franchisees.
Supplier Relationships
Choice Hotels International does not buy any goods or
services for the Comfort Inn, Comfort Suites, Quality, Clarion,
Sleep, MainStay Suites, Rodeway, or EconoLodge properties.
All hotels are responsible for their own purchases. Choice
does use its Strategic Partnerships Department to endorse
suppliers to its hotels based on the best value for the
franchisees. Suppliers are required to be able to distribute
nationally since all purchasing is done over the Internet on
Choicebuys.com.
Choice attends the National Minority Supplier Development
Council annual convention, US Hispanic Chamber of
Commerce annual convention, as well as the Black Enterprise
Entrepreneurs Conference to recruit new minority vendors. It
developed a Minority Vendor Development Program as an
initiative of its Strategic Partnerships group to service its
franchisees. It established a Minority Firm Tracking Program as
part of its preferred vendor program. The vendor submits a
capability statement, a decision on suitability is determined
and a contract written. Choice tracks negotiation through the
contract life with minority vendor firms. The data items
tracked in a computer database include: date of receipt of
interest, company/product or service contract, minority group
code, disposition, and date of final disposition.
For corporate purchases, Choice Hotels is a member of the
Board of Directors for the MD/DC Minority Supplier
Development Council. This association is used to expand the
pool of qualified minority suppliers for purchasing needs at its
local headquarters office. Other local chapters of the National
Minority Supplier Development Council are used to find
minority vendors for its satellite offices. In the fall of 2001,
Choices CEO mandated all associates to broaden their
supplier base to include an increased number of minority-
owned businesses.
We focus on widening and broadening the base of minority
vendors and suppliers, continues Ms. DAmbrosio. We dont
have a centralized procurement system so its a question of
education and facilitation. Explaining how and why it is
important, and making it easier for everyone to locate minority
vendors.
Charitable Giving
The Choice Hotels International Foundation was created two
years ago as a means for Choice Hotels to give back to the
communities where its associates live and work. The
Foundation grants funds to non-profit charitable organizations.
It is a goal of the Foundation to support organizations that
provide services to diverse populations. All grant requests are
submitted as a formal proposal. The grant proposal guidelines
determine what populations are served by the organization.
The Foundation also has several programs that support Choice
associates contributions. Its matching gifts program matches
dollar-for-dollar contributions made by Choice associates to
non-profits. The Foundation will also make a contribution of
$500 for every one hundred hours that an employee volun-
teers with a non-profit organization.
Choice Hotels has adopted a Title I elementary school in its
headquarters area. The school serves a diverse population
with many of the students immigrating from other countries.
Choice not only contributes financially to the schools PTA, but
also supports the school with volunteers for various events and
programs.
The Choice Hotels Foundation recently created a summer
youth job program to provide training in the hospitality indus-
try. With the help of an organization located in Washington,
DC, Choice identified at-risk students in the DC Metro area
that were interested in summer jobs. Choice associates volun-
teered to provide three consecutive Saturdays of training to
these students that focused on work force entry and customer
service. Choice managers, as well as managers form local
hotels, interviewed the students for summer jobs. Six of
twelve students were employed for the summer as a result of
this program.
The Foundation has also funded a scholarship through the
Thurgood Marshall Scholarship Program. The program identifies
academically talented and motivated African-American students
and provides scholarship and support services to historically
black public colleges and universities. Choices contribution
DIVERSITY REPORT AND CASE STUDIES 12
makes it possible for these students to attend the hospitality
management program at the colleges and universities.
Diversity Training
Diversification of its workforce is also a focus for Choice. The
percentage of women and minorities employed at Choice
Hotels continues to rise. This trend is due in part to initiatives
supported by the Human Resources Department to expand its
recruiting efforts. Choice works with search firms that special-
ize in identifying a diverse pool of candidates. Choice also
includes a number of historically black colleges and universi-
ties in its recruiting efforts.
Choice has offered diversity awareness training for associates
in past years. All associate training at Choice is developed
based on a comprehensive needs assessment that is conducted
each year and allows the company to provide the most
needed and pertinent training courses for employees. Training
offered in the area of diversity is developed in the same
manner.
We have two basic programs, reports Ms. DAmbrosio. The
first is for all employees, and involves a common ground
understanding of diversity. This occurs once a year, and is out-
sourced to a local college or university. The second program is
for management-level employees. A part of a management-
training course is dedicated to managing a diverse group of
employees. This course is given six times a year, and was
specially designed by Choices Educational Services
Department. In all cases, the training is done on company
time.
An initiative of the Training Department for 2002 and beyond
has been to thread a theme of diversity in all soft skill
courses offered, such as public speaking, conflict manage-
ment, etc. Choice offers associate training on a regular basis at
its facility in Silver Spring, MD. Training is also offered both
on-site and off-site for its other offices. Choice contracts with
local colleges to offer skills training for its associates.
Additional Resources
In developing Choices various initiatives, Ms. DAmbrosio has
found the following outside resources to be helpful.
The Multicultural Foodservice & Hospitality Alliance (MFHA)
65 Weybosset Street, Suite 60
Providence, Rhode Island 02903-2830
Phone: (401) 751-8883
FAX: (401) 751-8333
E-Mail: [email protected]
http://www.mfha.net/
The Alliance was created to enhance the industrys
overall diversity efforts. MFHA can help organize and
assemble the right combination of industry leaders,
suppliers, associations, educators and diversity experts to
leverage efforts around the following key issues;
- Human Resources
- Training
- Marketing
- Diverse Supplier Development
- Community Relations
National Association of Black Hotel Owners, Operators and
Developers
3520 W. Broward Blvd.
Suite 218B
Ft. Lauderdale, FL 33312
Phone: 954-792-2519
Mr. Andy Ingraham
The National Minority Supplier Development Council
(NMSDC)
1040 Avenue of the Americas, 2nd Floor
New York, New York 10018
Tel: (212) 944-2430
Fax: (201) 719-9611
http://www.nmsdc.org/
NMSDC is one of the countrys leading business member-
ship organizations, providing a direct link between
corporate America and minority-owned businesses. The
NMSDC Network includes a National Office in New York
and 39 regional councils across the country. The regional
councils certify and match more than 15,000 minority
owned businesses (Asian, Black, Hispanic and Native
American) with member corporations which want to
purchase goods and services.
The IFA Foundations report on Minority Outreach Programs
in Franchising.
DiversityInc.comis an online trade publication for diversity
offering a variety of news, information and resources on diver-
sity in the workplace at http://www.diversityinc.com/.
Choice Hotels International is the worlds second largest
lodging franchisor, marketing more than 5,000 hotels open or
under development in 46 countries under the Comfort Inn,
Comfort Suites, Quality, Clarion, Sleep Inn, Econo Lodge,
MainStay Suites and Rodeway Inn brand names. For more
information on Choice, visit the companys web site at
DIVERSITY REPORT AND CASE STUDIES 13
Summary Description
Dennys diversity program is founded on the strong belief
that Americas diversity is one of its greatest assets in a global
economy. The company views diversity as a rich source of
ideas, creativity and innovation. Dennys has ranked among
the top 10 leaders in corporate diversity by Fortune
magazine in its annual ranking of Americas 50 Best
Companies for Minorities every year since 1998, including
being ranked No. 1 for two years in a row (2000 and 2001).
The company has diversity initiatives in many different areas
of the companys operations, including the following:
Encouraging diversity in its management and workforce- 45
percent of Dennys more than 30,000 company employ-
ees are minorities; 44 percent of Dennys Board of
Directors are minorities or women; and 46 percent of
Dennys senior management team are minorities or
women.
Reaching out to minorities as potential franchisees -
Currently, 121 minority franchisees collectively own 467
Dennys restaurants, representing 44 percent of all Dennys
franchise restaurants. African-Americans own 57 Dennys
restaurants. In 1993, there was one African-American
franchisee. Hispanic-Americans own 64, Asian-Americans
own 82, and Asian-Indians own 263 restaurants.
Encouraging minority participation in Dennys Supplier
Diversity Program - Dennys contracts with minority
suppliers have grown significantly since 1992, when
there were no minority supplier contracts. Dennys
annualized minority purchasing contracts for 2001
reached $100 million, which represents 17 percent of
total annual food and non-food purchases. African-
American businesses account for the majority of Dennys
minority contracts.
Encouraging support for diversity and human rights through
its philanthropic contributions - Dennys was the largest
corporate sponsor of Save the Children (STC) from 1995
to 2001, contributing nearly $7 million to support STC
initiatives on behalf of disadvantaged U.S. children, over
half of whom are minorities. Dennys has committed to
raise at least $1 million annually for the next three years
from 2002 to 2004 to support the cause of civil
and human rights.
Reinforcing its commitment to diversity through education
and training - All 70,000 Dennys company and
franchise employees, management and non-manage-
ment, have completed diversity training. All Dennys
managers are required to participate in a full-day diver-
sity training session.
Monitoring and measuring diversity competencies - Every
year, every employee is evaluated against a set of key
competencies. Valuing and Managing Diversity is
within that set of competencies for both management
and non-management employees. Annual merit
increases are tied directly to these competency areas;
and from 1996 through 1999, 25 percent of senior
managements annual bonuses were tied to the
companys diversity progress.
My predecessor, Jim Adamson, was the architect
behind Dennys cultural turnaround. He hired Ray
Hood-Philipps to lead the way as the companys Chief
Diversity Officer. Today, we have a diversity record in
the retail food industry that is second to none. Were
proud of that record. I am committed to building on
this strong foundation not only because its good for
business but it is also the right thing to do. Diversity
and inclusion make us a better, stronger company. We
sell over a million meals a day at Dennys to customers
from every color, race and creed. If Dennys is to
prosper and thrive in the American marketplace, then
we need that same diversity reflected in our workforce,
at every level, as well as among other key stakeholder
groups from our board of directors, to our franchise
community, to our supplier base. Its my job to ensure
that this happens. Nelson Marchioli, Dennys Chief
Executive Officer and President
Primary Contact Person
Rachelle (Ray) Hood-Phillips
Chief Diversity Officer
Dennys Corporation
203 East Main Street
Spartanburg, SC 29319
Tel: (864) 597-7072
DIVERSITY REPORT AND CASE STUDIES 14
www.choicehotels.com.
Dennys Diversity Program Profile
DIVERSITY REPORT AND CASE STUDIES 15
Fax: (864) 597-6846
E-mail: [email protected]
Companys Overall Approach to Diversity
Dennys seeks to create and maintain an inclusive, high-
performance organization, believing that our differences can
be a source of richness, creativity and innovation. The
company has a four-fold approach to achieving this goal:
educate and train the workforce, at all levels, to value and
manage diversity; systematically eliminate all structures
(i.e., systems, practices, policies and processes) that impede
inclusion and create structures that foster diversity;
monitor, measure and report results on a regular basis to the
highest levels of the organization; and tie reward and recog-
nition systems to diversity progress.
Over the years, reports Ms. Hood-Phillips, we have
developed or acquired more than enough research that
demonstrates that diverse groups out perform non-diverse
groups both qualitatively and quantitatively. Diverse groups
are stronger, and more relevant to our customers. Dennys is
located in many communities across the country, and
someone who comes from a particular community can
always relate better to customers in that community. In terms
of employees, we have found that diverse teams are stronger
and produce higher and deeper levels of thinking. They are
more relevant to our customers.
Prior to 1995, continues Ms. Hood-Phillips, there were no
diversity considerations in our strategic marketing. There
were no targeted efforts. When we first began our diversity
initiatives we conducted an attitude and usage study and
found that the company was loosing some $100 million per
year in potential sales by ignoring the African-American
consumer. That was a real wake up call to senior manage-
ment. Last year, some 18% of our marketing budget is
targeted toward African-Americans and Hispanic-Americans.
Some funding is also targeted toward Asian-Americans, but
we are already well represented among that population.
In working to achieve its diversity goals and objectives,
Dennys has isolated 10 Keys to Diversity Change:
1. ACommitted Leader - The CEO of an organization must
set the tone, values, expectations and operating philoso-
phy for the company. He or she should be one of the
companys greatest champions of diversity.
2. Diverse Board of Directors- A diverse board - as opposed
to one lacking racial and gender diversity - is more likely
to examine the larger issues confronting the company,
both short and long term, with diversity issues in mind.
3. Accountability for Change- Someone of title and rank
must be accountable and responsible for driving change
throughout the organization.
4. Company-wide Ownership - Every worker must own
his or her portion of the goal. Company-wide ownership
forces diversity considerations into all aspects of
business operations.
5. Education & Training - There is no way to inculcate a
vision and an understanding of a new corporate culture
among many employees without education. The training
should begin at the very top of the organization, and
cascade through the rest of the organization, tailored to
address the issues facing each key level of the organiza-
tion and it should be on-going.
6. Clear, Enforceable Non-Discrimination Policies- The
absence of clear rules of conduct that outline what is
acceptable and unacceptable in terms of how people
will treat one another and the customer, regardless of
who they are, will result in people making up their own
rules as they go along.
7. Eliminate All Structures Impeding Inclusion- The
company must take care to eliminate all management
and human resources structures (i.e., how it hires, fires,
develops and promotes people) that impede inclusion,
and build back structures that foster diversity.
8. Monitor, Measure and Report Results - What gets
measured is what gets done.
9. Tie Diversity Progress to Rewards and Recognition
Systems - Make diversity a pocketbook issue for your
workers by including the valuing and managing of diver-
sity as an annual review salary issue.
10. Celebrate Your Success- Salute and honor the
companys top diversity champions. This sends a power-
ful message to the entire organization that embracing
diversity is an important priority, and that everyone is
expected to play a part.
Specific Diversity Activities
Expanding Ownership and Opportunities
In 1993, notes Ms. Hood-Phillips, there was only one
African-American owned Dennys restaurant. Today, 44% of
our franchises are minority owned. We used to have an initia-
tive called the Fast Track Program where qualified minority
franchisee candidates could spend 1-3 years learning the
business, and then be sold a restaurant with a proven revenue
flow. We also arranged for outside financing. But we decided
that was not the way to go - one or two restaurants at a time.
So we looked for ways to broaden our approach, and reach
out to larger minority constituencies and sources of capital.
Today Dennys uses a variety of methods to reach out to new
minority franchisees, ranging from presentations to minority
groups to targeted community outreach efforts. As a result of
these efforts, African-Americans now own 57 Dennys restau-
rants, Hispanic-Americans own 60, Asian-Americans own 82,
and Asian-Indians own 263 restaurants. We also have one
Native-American owned Dennys restaurant.
Supplier Diversity Program
Dennys is committed to the pursuit of business opportunities
for minority business enterprises in all aspects of the company.
It is the companys policy to give full consideration to minority
businesses having the actual or potential capabilities to meet
the companys needs. As such, the company will:
Seek out such businesses and provide the opportunity for
potentially qualified suppliers to demonstrate their ability
to meet company needs and standards.
Ensure that Minority Business Entrepreneurs (MBEs) fully
comprehend the companys requirements and are able to
bid appropriately.
Make every reasonable effort to help certified MBEs
meet the companys standards.
17 percent of all Dennys vendor business is targeted toward
minority vendors/suppliers, reports Ms. Hood-Phillips. We
annually spend $600 million with our vendors and suppliers.
All of our purchasing has goals for minority participation.
Our focus is to not only maintain and nurture existing minor-
ity suppliers, but to bring on new ones.
One of the primary channels Dennys has used to significantly
grow the companys diversity base is its Supplier Diversity
Program. As a central referral service, it provides the essential
link between diverse suppliers and corporate units to ensure
that qualified minority suppliers have an equal opportunity to
compete and participate in the procurement process. Through
this program, the company has been able to support minority
suppliers in other key areas, such as mentoring, community
outreach, and second-tier development.
The company web site (http://www.dennys.com/aboutus/)
includes a whole section on the Diversity Supplier Program,
including a Supplier Profile Questionnaire where minority
businesses can preview their capabilities, ownership, finan-
cial stability, etc.; a statement of Dennys requirements; and a
listing of food and non-food products the company buys.
Philanthropy and Community Relations
Dennys takes its diversity leadership position seriously, and,
in addition to providing outstanding opportunities in the
workplace, Dennys is also committed to providing opportu-
nities for minorities in communities across the country.
To help re-ignite Dr. Martin Luther King, Jr.s dream of equal-
ity and justice for everyone, Dennys will raise $1 million to
benefit the National Civil Rights Museum throughout 2002.
Rated by USA Weekend magazine as One of the Top 10
National American Treasures, the National Civil Rights
Museum, located in Memphis, Tennessee, is dedicated to
keeping Dr. Martin Luther King, Jr.s dream alive.
Dennys has pledged $250,000 to the Hispanic College Fund
(HCF) for the three-year period, 2002-2004. Recognizing that
Hispanics are the fastest growing minority group in the U.S.,
yet have a tremendous economic need for educational assis-
tance, Dennys is proud to be a supporter of this effort. HCF
is a private, nonprofit organization, founded in 1993. To
date, the HCF has provided over $1.3 million to more than
800 Latino students.
Since October 1994, Dennys has been a significant corpo-
rate sponsor of Save the Children. Through the support of its
employees, franchisees and customers, Dennys has
contributed nearly $7 million and has positively impacted
the lives of over 100,000 disadvantaged children in more
than100 U.S. communities. Over 50% of the recipients
benefiting from these funds are minority families.
NAAAP is the largest Asian-American Professional organiza-
tion in the U.S. Currently, it has 24 chapters, ventures, and
affiliates across the country and a growing national member-
ship. Dennys is a sponsor of the annual NAAAP National
Convention where over 5,000 Asian-American professionals
throughout North America come together to celebrate and
realize their common history, culture, and professional goals.
Diversity Training
The We CAN! Training programs are designed to encourage
tolerance and understanding on an individual level while
laying out for each employee their responsibility as an
employee of Dennys to provide consistent treatment to each
and every guest. The programs are broken down into
separate training sessions based on position and the level of
responsibility assigned to the individual. The two main
avenues through which the company communicates its
commitment to diversity is the We CAN! Video Trainingand
the We CAN! Developing Awareness Workshop.
All employees are required to view the We CAN! Video
Trainingand participate in a follow-up discussion which is
designed to check for understanding of the concepts
presented in the video. The video training focuses on the
challenges and perceptions that employees face on a daily
basis in the restaurant industry. It provides tools to help
them consistently treat each customer with dignity and
respect, and gives instructions on the action steps to take
when Dennys brand standards are not maintained. The
video training is the avenue through which the company is
able to pass along to each individual within the organization,
its commitment to diversity and the expectation of an equal
commitment from each employee.
All management and key personnel in the restaurant are
required to attend the full-day We CAN! Developing
Awareness Workshop. The objective of the Developing
Awareness program is to teach managers how to create and
maintain an environment in their restaurant that is free of
harassment and discrimination for guests and employees.
This message is communicated in a three-part outline:
1) People: Building Positive Interactions with Guests and
Employees - The focus of this section is on diversity:
recognizing the advantages our differences provide and
how individual beliefs and stereotypes impact the way
someone is treated. This section communicates to the
managers their job of identifying self-fulfilling prophecies
within their restaurant, and how to break the cycle by
helping employees see their behaviors as wrong and
correcting them.
2) Operations: Managing Guests Expectations and
Experiences - This section helps the managers under-
stand guests expectations and the importance of
realizing perception is reality. Once they understand
what the guests expectations are, they can become more
effective at managing the guests experiences by using
the tools and resources Dennys has implemented to
ensure its brand standards are being consistently applied.
3) Accountability: Laws, Policies and the Restaurant
Environment - This section teaches managers the Public
DIVERSITY REPORT AND CASE STUDIES 16
Accommodations Laws as well as the Dennys Policies
they are responsible for enforcing. It allows them to
recognize the negative impact on the environment of the
restaurant when these policies are violated, and lays out
for them the action steps to take when that occurs.
Dennys continues to refine the diversity training processes to
ensure its commitment to the message of diversity is
maintained and communicated throughout the organization.
For example, reports Ms. Hood-Phillips, we have an in-
house cadre of Trainer-of-Trainers who conduct much of our
diversity training. As part of their training, all have gone to
the National Civil Rights Museum to help them gain a
broader perspective on diversity and what it means to this
country as a whole.
Additional Information/Resources
For those IFA members seeking to expand their diversity
initiatives, Ms. Hood-Phillips offers the following advice.
When I joined the company in 1995, we had no friends -
there were no partnerships, no community outreach. etc. So
when we experienced problems, there was no one out there
to support us. Back then we were considered the poster child
for discrimination. But today, Fortune magazine ranks
Dennys as one of the most inclusive companies in the
country. We like to say weve gone from worst to first, and
the changes have been both cultural and structural.
So often, companies think only internally and not externally.
Today, we greatly benefit from our community outreach
efforts. We make a conscious effort to identify appropriate
groups in communities and become part of their agendas.
We meet with many ethnic groups to explain what we are
doing and receive advice and feedback. These are great
resources. They give us advice and counsel, and also help us
identify people within their respective communities that have
the resources to become Dennys employees, franchisees and
suppliers. We dont just do community outreach for its own
sake. It is always a targeted effort designed to better position
the company within a specific community.
A final point. We have a management committee of 14
persons, 33% of whom are minorities. In reforming the
company, we made a conscious effort to ensure that there
was diversity in the top ranks of the company. From there it
just cascades down throughout the rest of the company. But
it has to start at the top!
In the earlier stages of its diversity initiative, Dennys called
upon Souder, Betances and Associates, Inc., a diversity train-
ing and consulting firm, to provide training to Dennys top
leadership by painting a vision of how the company could
be transformed through diversity. Dennys has since used the
firm as a keynote speaker at management workshops and
meetings.
Dr. Samuel Betances
Souder, Betances and Associates, Inc.
Pacific Suite
5448 N. Kimball Avenue
Chicago, IL 60625
Tel: (773) 463-6374
Fax: (773) 463-0429
E-mail: [email protected]
http://www.betances.com/
More information on Dennys Diversity Programs can be
found at http://www.dennys.com. Dennys has shared its
story of building an inclusive culture through a book written
by chairman, James B. Adamson, entitled, The Dennys
Story: How a Company in Crisis Resurrected its Good
Name. Adamsons royalties from the book, published by
John Wiley & Sons, Inc., are designated to benefit Save the
Children, Dennys national charity.
Dennys is the nations largest full-service family restaurant
chain with more than 1,700 locations in the United States,
Canada, Costa Rica, Guam, Mexico, New Zealand and
Puerto Rico. The companys stock is traded under the ticker
DNYY, and information is available on Dennys web site at
www.dennys.com.
DIVERSITY REPORT AND CASE STUDIES 17
Summary Description
Dominos Pizzas diversity philosophy is based on the organi-
zations Vision and Guiding Principles. Dominos views
diversity as a competitive advantage and, as our culture
becomes more inclusive, the company can create opportuni-
ties throughout the organization so that the talents of all
employees will be fully realized.
According to the companys Diversity Statement, we are
committed to creating a unified and inclusive environment
that respects and celebrates the uniqueness of our excep-
tional people who invest their time, talents, and energies
while striving to make our company the best pizza delivery
company in the world.
Dave Brandon, Chairman and CEO, based on the following
Guiding Principles, initiated a more comprehensive
approach to diversity in 2000:
We demand integrity
Our people come first
We take great care of our customers
We make perfect ten pizzas everyday
We operate with smart hustle and positive energy
There are a number of important things we need to
accomplish at Dominos Pizza. None are more impor-
tant than our commitment to creating a diverse,
high-performance culture that will establish us as an
employer of choice and a great place to work. We
aspire to be Exceptional People on a Mission to be the
Best Pizza Delivery Company in the World. We
cannot fully achieve our vision without embracing and
celebrating the diversity of our workforce and the criti-
cal role it will play in shaping our future success.
- Dave Brandon, Chairman and CEO
Primary Contact Person
Jim Betts, Senior Director of Diversity
Dominos Pizza, LLC
30 Frank Lloyd Wright Drive
P.O. Box 997
Ann Arbor, MI 48106-0997
Tel: (734) 930-3584
Fax: (734) 930-4350
E-mail: [email protected]
Companys Overall Approach to Diversity
According to Mr. Betts, Dominos approached diversity from
a broad perspective and took a lot of time to make sure our
people understood that diversity was not affirmative action,
nor was it just about race and gender. We focus on our
people and want to make sure that everyone here is valued.
The companys philosophy and goals have always been
focused on having exceptional people, and we understand
that those people come in all shapes, sizes, colors, etc.
For Dominos, continues Mr. Betts, the issue we faced was
understanding that we have this emerging majority, both as
employees and as customers. How do you create an organi-
zation that is reflective of the community, but is also
inclusive in nature and at the same time is working with the
under-served and the under-developed? When it comes to
diversity, its no longer business as usual youre either in
it, or youre out of the game!
One of the biggest challenges, reports Mr. Betts, was
educating our own people on the breadth of diversity its
not just a race issue. People need to get beyond that and
understand diversity and how it impacts our business and
them as employees. A company should be representative of
its customer base.
One of our primary objectives, continues Mr. Betts, is to
grow our franchise and store market. We understand that there
are areas under developed and markets under served, and we
are focusing on growing those markets through our minority
franchise group. From a marketing perspective, were taking a
multi-cultural approach with our general market marketing
and a targeted approach with the Hispanic market.
To meet these challenges, the company initially created a
Diversity Team comprised of 27 individuals ranging in title
from CEO to Administrative Assistant. This cross-organization
group then set out to define the role of the Team, and
identify areas for action. The Team developed the following
objectives, assigning a subcommittee to each area:
Formalized Measures- the development of diversity
measurements and methods within the company, with
quarterly reporting to top management;
Formalized Mentoring- which began with a pilot program in
October 2002 involving one-on-one and team mentoring
by 5 executive staff leaders;
Formalized Policies and Procedures- benchmarking the
company to make certain that all policies and proce-
dures were inclusive; and
Formalized Culture- which led to the development of a
Multi-Cultural Series that highlights various cultures in
an effort to remove stereotypes and lead to better
cultural understanding and learning.
Another challenge for us was getting our Diversity Team
aligned with our specific objectives and understanding our
DIVERSITY REPORT AND CASE STUDIES 18
Dominos Pizza Diversity Program Profile
DIVERSITY REPORT AND CASE STUDIES 19
role, reports Mr. Betts. We have 27 people who represent
all areas of the organization. In implementing these objec-
tives, we measure very specific areas such as representation,
gender-pay equity, just to name a couple. We track the
opportunities for employment and make sure we have a full
slate of candidates to choose from. Weve since added two
more objectives that address our minority franchise group
and our vendor/supplier program.
As part of the initial effort to develop a comprehensive
approach to diversity, Dominos undertook an assessment of
the organizations culture using the Dennison Culture Survey,
and a series of focus groups and interviews by an outside
consultant that spanned the organization and sought to deter-
mine how employees felt about the company.
The Dennison Culture Survey is designed to provide 360-
degree feedback from the organization in four quadrant
areas:
I. Adaptability- Translating the demands of the business
environment into action.
Creating Change- The organization is able to create
adaptive change. It is able to read the business
environment, quickly react to current changes, and
anticipate future changes.
Customer Focus- The organization understands and
reacts to the customer. It reflects the degree to
which the organization is driven by a concern to
satisfy the customer.
Organizational Learning- The organization
receives, translates, and interprets signals from the
environment into opportunities for encouraging
innovation, gaining knowledge, and developing
capabilities.
II. Involvement - Building human capability, ownership and
responsibility.
Empowerment - Individuals have the authority,
initiative, and ability to manage their own work,
thus creating a sense of ownership and responsibil-
ity toward the organization.
Team Orientation- Value is placed on working
cooperatively toward common goals to which all
employees feel mutually accountable. The organiza-
tion relies on the team effort to get work done.
Capability Development - The organization contin-
ually invests in the development of employees skills
in order to stay competitive and meet on-going
business needs.
III. Mission- Defining a meaningful long-term direction for
the organization.
Vision- The organization has a shared view of a
desired future state. It embodies core values and
captures the hearts and minds of the organization,
while providing guidance and direction.
Strategic Direction & Intent - The organizations
plan to make their mark in their industry. Clear
strategic intentions convey the organizations
purpose and make it clear how everyone can
contribute.
Goals & Objectives- A clear set of goals and objec-
tives can be linked to the mission, vision, and
strategy, and provide everyone a clear direction in
their work.
IV. Consistency- defining the values and systems that are
the basis of a strong culture.
Core Values- Members of the organization share a
set of values, which create a strong sense of identity
and a clear set of expectations.
Agreement - The organization is able to reach
agreement on critical issues. This includes the
underlying level of agreement and the ability to
reconcile differences when they occur.
Coordination & Integration- Different functions
and units of the organization are able to work
together well to achieve common goals.
Organizational boundaries do not interfere with
getting the work done.
Based on the Survey, reports Mr. Betts, we focused our
initial efforts on where we had scored the lowest. We also
used the Survey results and feedback from the focus groups
and interviews to design our diversity-training program.
Once measures were put in place like focusing on gender
and pay, recruitment and turn over and measuring these
there was a better appreciation. Its a more formal
approach, and its changing the company.
Specific Diversity Activities
Expanding Ownership and Opportunities
Dominos has traditionally relied on its own internal market
as a source for new franchisees. Starting in 2000, Dominos
introduced a pilot Franchise Development Program in the
Houston, Texas area designed to encourage more minority-
owned franchisees among the Dominos community. The
program seeks to identify qualified minority candidates with
the necessary business skills and financial capability, and
then to fast track them into franchise ownership. The
Houston project is moving along quite well, reports Mr.
Betts. We have two franchisees in stores right now. We have
two potential franchise candidates waiting to get into stores,
hopefully, in the next 60 days. And we have two more candi-
dates who have completed their initial training here in Ann
Arbor and are back in Houston completing their in-store
training. Hopefully, they will complete the Franchise
Development Program before year-end and be ready to
franchise either by year-end or the first of next year.
Under our traditional system, you had to manage a
Dominos store for at least a year before you could apply to
own a franchise. Under the pilot project, qualified minority
candidates can become a Dominos franchisee in 10-12
months instead of the traditional 1-2 years. Our goal is to
have 10 of these pilot franchises up and running by the year
2005.
Supplier Relationships
Dominos is currently in the process of developing a minority
vendor/supplier program, and expects to have all of the
components in place by the end of the year. With 7,000
plus stores, reports Mr. Betts, we have previously focused
on the distribution side. Now we are looking at all of our
purchasing agents, and at what they buy. Weve had two
meetings thus far on this. Were no longer just looking at the
traditional suppliers, but are considering different options.
Diversity Multi Cultural Series
In addition to addressing and measuring diversity issues from
the human resources and personnel perspective, Dominos
has developed other creative initiatives to address diversity in
the workplace. The company has created a Multi Cultural
Series designed to create better understanding, appreciation,
and a dialogue among employees about various cultures.
For example, notes Mr. Betts, Dominos has a very large
Middle Eastern contingent, including 104 franchises owned
by people of Middle Eastern descent. After September 11,
2001, we wanted to make sure that the terrorist incident did
not jeopardize those relationships. So we developed a
pamphlet on Frequently Asked Questions About Arab
Americans, and then brought in outside experts from the
Islamic Center and Muslim business leaders to talk about the
effects of 9/11, discuss the Islamic religion, and various
misunderstandings and misperceptions such as the often-
misused term holy war. We have also done a similar Multi
Cultural Series on Asia and the Pacific Rim, trying to take the
stereotypes out of the dialogue. Holiday seasons at Dominos
are also multi-ethnic now, and these sorts of efforts run 360
days a year.
Diversity Training
Dominos has been providing diversity training to its corpo-
rate employees for over five years, and provides
diversity-training support to its franchisees on a case-by-case
basis. The company now has twelve internal staff qualified to
provide ongoing diversity training throughout the year. The
training follows a formal, written curriculum designed with
input from the earlier Dennison Culture Survey and
employee interviews/focus groups, and makes use of videos,
lectures, written materials with case studies, and role-
playing.
Peoples diverse backgrounds can sometimes be an obstacle
to being the best you can, reports Mr. Betts, so our diver-
sity training focuses on the so called isms. People are all
different, but all bring value to the workplace. This needs to
be both understood and appreciated.
Dominos diversity training addresses the following areas:
Exploring the impact of prejudice and stereotypes;
Understanding how biases, stereotypes and prejudice
impede productivity;
Understanding why diversity leadership is critical to
Dominos overall success;
Knowing how to give feedback respectfully;
Offering ideas for support and next steps; and
Uncovering specific keys to personal learning.
Additional Resources
For those IFA members seeking to develop their diversity
initiatives, Jim Betts offers the following advice. First, there
must be engagement from top management, starting with the
CEO. Otherwise, it just wont work. Second, the company
must do a wide cultural assessment of where the organiza-
tion and where its people are in terms of diversity. From that
you then begin to design your programs. Third, if you have a
short-term mentality about it, it wont work. This is a process
- a journey - and there will be difficulties along the way.
Next, you must be prepared to market the program, both
internally and externally. Its not just about race and gender.
And finally, people must come to understand whats in it for
them - both for the company, and for them as individuals.
The Dennison Cultural Surveywas first introduced to
Dominos by
Ron Potter, President
Team Leadership Culture (TLC)
2237 Stonebridge Drive S.
Ann Arbor, MI 48108
Tel: (734) 429-9787
Fax: (734) 661-0346
E-mail: [email protected]
Hubbard & Hubbard Inc., an international organization and
human performance consulting corporation, sponsors the
Hubbard Diversity Measurement & Productivity Institute that
offers a series of workshops around the country that provide
on-going skill building with a focus on measuring organiza-
tional productivity and results. Their workshops include
How to Measure Diversity Results, How to Build a
Measurable Diversity Strategic Plan, How to Calculate
Diversity Return on Investment, among others.
Dr. Edward E. Hubbard
President & CEO
Hubbard & Hubbard Inc.
1302 Holm Road
Petaluma, CA 94954-1164
Tel: 707-763-8380
Fax: 707-763-3640
www.hubbardnhubbardinc.com
DIVERSITY REPORT AND CASE STUDIES 20
DiversityInc.comis an online trade publication for diversity
offering a variety of news, information and resources on
diversity in the workplace. You can visit them at
http://www.diversityinc.com/.
The Conference Board, founded to improve the business
enterprise system and to enhance the contribution of
business to society, publishes a number of publications and
reports on diversity including
Corporate Practices in Diversity Measurement
Diversity: Business Rationale and Strategies
Diversity Training
Workforce Diversity: Corporate Challenges
In Diversity is Strength: Capitalizing on the New
Workforce
The Conference Board Inc.
845 Third Avenue
New York, NY 10022-6679
Tel: (212) 759-0900
Fax: (212) 980-7014
www.conference-board.org
Founded in 1960, Dominos Pizza operates a network of
7,096 company-owned and franchised stores in the United
States and more than 50 International markets. Dominos
Pizza can be found on the World Wide Web at
www.dominos.com.
DIVERSITY REPORT AND CASE STUDIES 21
DIVERSITY REPORT AND CASE STUDIES 22
Project Coordinator and Editor
Richard S. Willard
President
Management Resources International
9912 Silver Brook Drive
Rockville, Maryland 20850
Tel: (301) 340-6488
Fax: (301) 340-7451
e-mail: [email protected]
Web site: www.mgtresourcesintl.com