Tuesday, April 4, 2017

Chin Jou's "Supersizing Urban America"

Chin Jou is a Lecturer in American History at The University of Sydney.

She applied the “Page 99 Test” to her new book, Supersizing Urban America: How Inner Cities Got Fast Food with Government Help, and reported the following:
Page 99:
But while the fast food industry wooed prospective African-American franchisees—one survey by the International Franchise Association in 1992 found that 74 out of 180 franchise companies (not just fast food) claimed to have minority recruitment programs—they seldom reached into their own pockets to assist minority entrepreneurs. The financial assistance they provided was generally limited to modifying asset and down payment requirements for minorities. When Burger King signed a covenant with the civil rights organization Operation PUSH (People United to Save Humanity) in 1984, for example, it agreed to raise the number of African-American franchises from less than 100 (out of 3,800) to 540 by 1987. To achieve this goal, the company pledged that it would reduce the down payment for African-American franchisees from $125,000 to $25,000. But that was where the burger chain’s “assistance” ended. As the company’s spokesperson John Weir told Black Enterprise, “The rest of the financing is arranged by the owner himself.” The same had been true of many other restaurant franchisors in earlier years. In 1971, the Senate’s Select Committee on Small Business found that only 38 of 180 franchisors surveyed made financing help available. This assistance, moreover, frequently meant that the franchisor participated in minority recruitment programs sponsored by the SBA or the Commerce Department. So when franchisors vaguely touted “minority financing program available,” as the Subway chain did in an ad appearing in Black Enterprise in 1996, they meant that they could refer prospective franchisees to sources of government funding like the SBA.
African-American franchisees came on the radar of fast food companies when the industry looked to expand to predominantly minority inner-city locations starting in the late 1960s and early 1970s. By the 1980s, black franchise owners were sought after to draw and retain the African-American consumers who were becoming indispensable to the fast food industry’s bottom line. In 1985, African-American customers accounted for 15 percent of all fast food sales, despite...
As the subtitle of Supersizing Urban America reads, this book is about “how inner cities got fast food with government help.” One of the ways the U.S. federal government contributed to the expansion of fast food chains into urban African-American communities since the late-1960s was by partnering with fast food companies in encouraging the growth of black-owned franchises through minority entrepreneurship programs in the U.S. Department of Commerce and loan guarantees from the Small Business Administration. The top paragraph on page 99 shows a way in which the federal government bore a disproportionately high cost in these “partnerships” by providing the actual financing assistance to would-be fast food franchisees. Meanwhile, often times fast food companies simply signed pledges to recruit minority franchisees, and met with little or no repercussions if they not did meet the goals set in these pledges.

As the chapter on which page 99 appears notes, participation in government-sponsored minority entrepreneurship programs could be a win-win for fast food companies because it allowed them to publicize their support for diversity initiatives and minority entrepreneurship without actually having to contribute much to these efforts. Moreover, when fast food companies nudged prospective African-American franchisees toward federal financing programs, it enabled them to expand into inner-city communities that they had been eyeing for expansion since the 1960s with little risk and expenditure on their part.

An unintended consequence of the federal government’s assistance to fast food chains’ urban expansion efforts is, as the lurid cover and main title of this book scream, that the U.S. federal government contributed to an obesity epidemic in the communities where it helped underwrite fast food restaurants. Page 99 of this book, then, turns out to be a key part of the larger story.
Learn more about Supersizing Urban America at the University of Chicago Press website.

--Marshal Zeringue