Alpha Phi Alpha Fraternity cuts deal with chain restuarant

By ANDREA K. WALKER
The (Baltimore) Sun
10/06/2002

BALTIMORE — Alpha Phi Alpha Fraternity Inc., the country’s oldest black
fraternity, has entered into a $30 million deal with Church’s Chicken to
acquire franchises in inner-city neighborhoods and create a new pool of
black business owners.

The Baltimore-based fraternity will acquire at least one franchise and help
its members buy 49 others during the next five years. The agreement is part
of a fraternity initiative to develop neglected neighborhoods and create
business opportunities for minorities.

“We [blacks] don’t own many franchises now because of roadblocks,” Alpha
General President Harry E. Johnson Sr. said. “We’re trying to erase some of
those roadblocks.”

This is the first business venture for the fraternity, which recently
created a separate foundation for economic development projects. Alpha Phi
Alpha will receive a quarter of a percent of the net proceeds from each
franchise, which will help finance economic development initiatives.

Johnson said he hopes to open a franchise in the Baltimore or Washington
area in the next nine months.

As part of the deal, Church’s reduced by 50 percent the fees to apply for a
franchise. The company also will handle the real estate acquisitions and
land deals in most cases. The cost of a franchise ranges from $600,000 to
$800,000.

The Small Business Administration is a partner in the venture, and will
prequalify people who complete a one-week training class on how to run a
fast-food business.

Church’s officials said the agreement will help the company with its
expansion strategy.

Many of its restaurants, including those in Baltimore, closed after Popeye’s
bought the privately owned company in the late 1980s. In 1992, Atlanta-based
AFC Enterprises bought both chicken companies and is now trying to improve
Church’s standing.

The company concentrates many of its restaurants in urban, older
neighborhoods, places the Alphas want to help revitalize. The chain has
1,500 restaurants worldwide.

“We’re really excited about this relationship,” said Hannibal Myers,
Church’s worldwide development officer. “It’s a good match for Church’s, as
a company that is trying to grow, and Alpha Phi Alpha, which is trying to
provide other opportunities for its members.”

Some in the industry said the deal is a wise one for Church’s, the No. 4
chicken restaurant company, which is trying to gain market share. “If it’s
implemented correctly, the company gets new stores and new franchises and it
helps with the diversity of the business. The fraternity gets into the
franchise business,” said Dennis Lombardi, executive vice president of
Technomic Inc., a Chicago-based food-service consulting firm.

-Source: HBCUsports.com

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