Living Case Study Webinar -- Measuring Social Sector Franchise Impact: How Lean Data measurement can help improve franchise impact and success
Wednesday, June 7, 2017
10:00 a.m. - 11:00 a.m. (EST)
By definition Social Sector Franchises promise to deliver needed goods and services at scale with measurable social impact. While a large number of tools and frameworks are available for measuring impact there are limitations to how well they will keep up with franchise growth without becoming prohibitively cumbersome or costly. In this webinar we will review a few of the more common approaches to impact measurement and their limitations and will learn about an exciting new tool for impact measurement developed by Acumen. In its application across the globe Lean Data is making it possible for social enterprises get accurate and timely data at relatively low cost and ease of implementation.
Guest moderator Fiona Wilson, Executive Director of the Center for Social Innovation and Enterprise will be joined by Greg Starbird a social franchise expert to discuss the importance and challenges of impact data measurement in social sector franchising. Fiona and Greg will be joined by Ashley Speyer Acumen’s Lean Data Senior Associate who will describe this exciting methodology and give examples from its use with several of Acumen’s social businesses. A question and answer segment will give broadcast viewers a chance to interact with our webinar guests.
Living Case Study Webinar -- Creative financial models to drive social franchise success
There are a range of investment vehicles currently used to support social sector franchises in health, water, sanitation, education, clean energy, and agriculture. Each is attracted to the tremendous potential that the franchise model can deliver for social and financial returns. That potential can only be realized when social franchises are developed in a methodical way that requires different types of resources at various stages of growth. Better coordination among financing institutions to create blended financing options that drive healthy growth of social franchises will benefit investors, investees, and the people that social sector franchises serve. In our second webinar guest moderator Julie McBride of MSA Worldwide will engage guests in a discussion around current financial products and investment practices and opportunities for creating more strategic ways to support social franchising. Guests include Michael Swack from the Center for Impact Finance at UNH a leader in the impact investment field, John Simon from TOTAL Impact Capital, a boutique finance firm specializing in sourcing and developing private investment opportunities that are socially and financially attractive and Randy Welsch, Co-founder of Jibu, a for-profit business with the integrated goals of making money and making charitable impact.
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First Living Case Study Webinar -- Jibu Rwanda - Infusing Lessons Learned for Intelligent Scaling
The Center for Social Innovation and Enterprise's Living Case Study Social Sector Franchise Accelerator is an action learning and research project, which will take place over eight months with three entrepreneurs who are new or emerging social sector franchisers. Jibu is rapidly expanding its clean water franchising in East Africa recently opening a new franchise center in Kigali, Rwanda. Our first webinar moderated by Bill Maddocks will explore how Jibu’s expansion is progressing and we will talk with LCSA protégé Mark Mutaahi, his mentor Peter Holt, Jibu co-founder Galen Welsch and Rwanda country director Nathan Dowling about operational challenges including the need for proper training and data to drive decision making as franchisees are recruited and a marketing strategy is plotted.
Broadcast participants are encouraged read the LCSA Jibu page and blog entries and come to the webinar ready to ask questions and be active members of this real time learning opportunity.
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The International Centre for Social Franchising (ICSF) was born out of frustration that successful solutions often fail to scale, so social organisations waste scarce resources by needlessly reinventing the wheel. ICSF seeks to identify, ‘scale’ (replicate) and share ideas that work. Over the past five years that’s taken a lot of different forms, using innovative replication models to scale the use of buses that allow homeless people to shower and keep clean in San Francisco, with Lava Mae, to working with NSPCC’s Baby Steps team, increasing support to new parents to care for and reduce the stress associated with the arrival of their new baby.
New solutions for the NHS?
The NHS is under constant pressure to find solutions that have the potential to improve health care outcomes or deliver cost savings at scale. This has become even more apparent to me over the past few months as I’ve explored scaling up in the UK health care sector more closely. ICSF has been travelling across the country to meet with project teams that have been supported by the Health Foundation.
We’ve seen inspirational clinicians and managers who go above and beyond every day, to invest in improvement and innovation solutions to boost health care outcomes. The landscape of possible solutions is diverse, ranging from delivering multi-disciplinary support to advanced symptom Parkinson’s patients, to preventing prescribing errors in GP practices. But too often these solutions exist as isolated pockets of excellence and are infrequently implemented at wider scale locally or nationally.
As we explored the specific challenges of replication within the UK health care sector we found that a popular way to ‘scale up’ an approach or intervention to improve patient care is through sharing best practice. ICSF calls this activity ‘dissemination’. It can work excellently for particular solutions or contexts, for example clinical networks - where clinicians share best practice and ideas for making small scale changes to practice. But for other approaches and interventions, particularly those that are more complex, dissemination alone can be insufficient.
To begin to understand why dissemination only works for some solutions or contexts, we listened and we learned through available literature and interviews with people working in the health care sector. We heard time and again about the challenges associated with dissemination – that more support was needed to create behaviour change, or that there was a lack of clarity about the approach or intervention being scaled up.
We believe more structured ways of replication such as social franchising or licensing have particular potential to help scale solutions across the NHS. Social franchising is based upon the commercial franchising model where companies, such as the Body Shop, use franchises to expand. Our chief executive Dan Berelowitz spent time with The Body Shop, McDonald’s and some great social enterprises, understanding what makes replication and franchising work. In this model a proven business model is ‘boxed’ up and passed on to others to replicate with appropriate support. Social franchising follows the same principle, allowing an organisation to package what works and provide support to others to adopt it, with a focus on replicating impact. This retains the essence and fidelity of the core elements of the approach, while remaining flexible and open to adaptation to the local context.
It is this model that we recommended to NSPCC for scaling their Baby Steps programme, with the charity transitioning from being the direct provider of the service, to acting as a franchisor overseeing implementation by local mainstream organisations such as Children’s Centres and also by midwifery teams. We believe this model enables NSPCC to ensure fidelity to the evidence-based model, whilst enabling local ownership.
Case study: Can this model be translated to a primary care setting?
One of the project teams we met with to explore these replication models was the team responsible for IRIS (Identification & Referral to Improve Safety), a general practice-based domestic violence training, support and referral programme for primary care staff. Since beginning the research trial in 2007 to becoming a commissionable model in 2010, IRIS has been commissioned across the UK, leading to increased identification and referrals for victims of domestic violence. Having successfully scaled to date by responding to requests for their service, the IRIS project team is now at a point in their scale journey where the team wants to be more proactive in its replication approach.
IFA Social Sector Task Force Presents Webinar: Social Sector Franchising – What is it and how you can get involved
Click here to access the webinar recording
*The mission statement of the Social Sector Task Force is: “To Enhance The Quality Of Life In Underserved Populations – One Opportunity At A Time”. The members of the Task Force – all drawn from our IFA Family – in addition to sharing best practices, provide mentoring and coaching to NGOs and Social Franchisors.
Senior Social Franchising Advisor
Senior Learning & Manuals Consultant
During the Franchising and Multiple Bottom Lines panel at IFA’s 2017 Convention there was confusion about whether and how restaurants can donate excess food. IFA reached out to our friends at the National Restaurant Association who shared the following details on the The Good Samaritan Food Donation Act.
The Good Samaritan Food Donation Act
Increasing food donations to charitable organizations is one of the best ways restaurants can reduce food waste and divert material from landfills. However, some restaurants are reluctant to donate their excess food due to fear of liability exposure if that food were to cause a foodborne illness.
Fortunately, federal law provides liability protection for food donated in good faith. In 1996, Congress passed the Bill Emerson Good Samaritan Food Donation Act that provides civil and criminal liability protection to businesses that donate food. The Act protects donors as long as they meet the following requirements:
What’s Good Faith?
While the statute does not specifically address what constitutes good faith, this familiar legal concept embraces conduct that is motivated by a sincere and honest intention to deal fairly with others and that the donor believes the food to be safe for consumption.
What’s Apparently Wholesome Food?
Food that meets all federal, state, & local quality and labeling standards even though the food may not be readily marketable due to appearance, age, freshness, grade, size, surplus, or other conditions.
Are there any exceptions?
Under the Act, as long as the donor has not acted with gross negligence or intentional misconduct, there are no exceptions: the company is not liable for damage that might be incurred as the result of illness.
Does this conflict with state laws?
The Act provides federal protection and preempts all state laws that provide less liability protection than the Bill Emerson Act. States are of course free to provide greater liability protection than the federal law. In the past, a patchwork of state laws essentially required a comprehensive survey of the law in all states and the adoption of jurisdiction-specific recovery practices. Now, food donors need only seek protection under one law and do not need to investigate liability laws, nor pursue protection in 50 states.
Has anyone been sued for a foodborne illness?
Millions of pounds of food are donated daily and not a single case involving food donation-related liability has been reported. The absence of litigation demonstrates that fear of lawsuits or other negative publicity related to mishaps with donated food are overstated and largely illusory barriers to food recovery.
State and Local Health Regulations
The Act does not waive state and local health regulations. All restaurants donating food must still comply with all state and local health regulations, which are typically no different from those required for retail sale.
Source: Legal Guide to the Bill Emerson Good Samaritan Food Donation Act, University of Arkansas, http://media.law.uark.edu/arklawnotes/2013/08/08/the-legal-guide-to-the-bill-emerson-good-samaritan-food-donation-act/#note-1448-168
By Galen Welsch Co-Founder, CEO. Randy Welsch Co-Founder, President, Jibu
Nice things being said
Thanks to so many of you saying nice things about us, we continue to receive outsized opportunities to share the Jibu story, most recently at the White House, the Global Entrepreneurship Summit and the Toronto Global Economic Forum among other venues. What seems to resonate with audiences is not just the expanded access to drinking water we are bringing, but our business model – how we are primarily fueled by our passionate, co-invested local entrepreneurs who are pathfinding a new way for social enterprises to be more than just sustainable.
In addition to the positive press, we were also honored by B-Lab as one of the “Best in the World” B-Corps recently. If you haven’t seen it yet, check out this BBC mini-documentary on Jibu.
We are currently raising $7M of equity and grants in our Series B growth round. It is going well but we need some help to reach this goal by the end of the year. Equity investments hopefully generate a nice return while grants provide leverage and grants highly leveraged to multiply impact. This funding would enable us to launch 1000 new franchises, expand to at least 10 new countries (with some in new continents) and, most importantly, be able to continue our current growth trajectory fueled primarily by organic profit rather than solicit future grant or equity investments.
This article first appeared in the July, 2016 issue of Franchising World Magazine
Dr. Rozenn Perrigot
Associate Professor and Director of the Center in Franchising, Retail & Service Chains
Graduate School of Management – University of Rennes 1 – France
Muhammad Akib Warraich
PhD Candidate at the Center in Franchising, Retail & Service Chains
Graduate School of Management – University of Rennes 1 – France
Business-format franchising – hereafter known as franchising – is booming in most developed and developing countries worldwide and in most sectors of activity, including retailing, services and more recently in the social sector. Furthermore, there is an increasing interest in the application of principles of franchising in sectors of activity such as healthcare, energy provision, water purification, education in Africa countries, Asian countries and South American countries.
As part of a broader research program dedicated to franchising in the social sector, we investigated how franchising works in a social area such as the education sector. For this empirical research, we focused on the Pakistani market. We gathered secondary data and discovered the importance of franchising in the education sector in Pakistan: 22 franchised chains from elementary to high school, with a total of 3,573 branded schools and an enrollment of 1,233,700 students in the branded schools. A few examples of established franchise chains are The Educators with 700 franchised campuses in 212 cities and villages with 175,000 students; Allied Schools with 730 franchised campuses in 243 cities and villages with 195,000 students; Dar-e-Arqam with 525 franchised campuses in 164 cities and villages with 150,000 students. To go further, we conducted 43 face-to-face interviews with eight franchisors, nine franchisees, nine employees, eight parents and nine students in the Punjab Province. The analysis of the content of these interviews led to some of the following findings.
The emergence of franchising in the education sector
The emergence of franchising in the education sector seems to be a result of the limits of the public school system and its lack of resources. A franchisee explained that “the success of franchise networks is obvious, because [the franchisees] use [their] resources, i.e., faculty and funds, etc., efficiently.” A student told us that “if [he] compare[s] franchised schools with public schools, without any doubt franchised chains are far better than public ones.” A parent added that “[he] prefer[s] franchised chains for [his] children, because they offer excellent teaching services at a low-cost fee which is indeed a very attractive feature for all parents. They use impressive advanced teaching and learning techniques that public schools are not using at all.” This interviewee was “completely satisfied with the performance of franchised schools.”
The social dimension of franchising in the education sector
First, franchising provides benefits for the society as a whole. A student asserted that “franchisors motivate parents to educate their children through TV advertisements. They [i.e., franchisors] are promoting education in our society.” A franchisee pointed out one specific benefit of franchising explaining that “now the poor segment of [his] society, like drivers and vegetable sellers, can also get quality education for their children. The improvement is that now their children are studying together with other children. This will reduce the problems in [the] society.”
Moreover, franchising is also shown to aid in the increase of literacy rates, above all in rural areas. For instance, a franchisee explained that “this is a very important advantage. The same quality of education [is provided] to remote areas and additionally extra expenses [are saved by these people]. [They are] provided with good teachers, good administration, good course notes. It is such a blessing to get all these quality services on the doorstep.” The specific case of quality education for girls was also underlined by a franchisee: “[E]specially for girls, as it is more difficult for them to travel daily or move to some other city. […] That it is a social welfare for people.”
Finally, franchising is a source of job opportunities for both entrepreneurs who can become franchisees, as well as teachers who will be employed by these franchised schools. One of the interviewed franchisees mentioned employing 34 teachers in his school. An employee specified that “franchise networks have swiftly improved and promoted educational facilities for students. They have offered viable business opportunities for local investors to open a franchised campus and they are also offering better employment opportunities for teachers.”
Respecting the basic principles of franchising
Franchising in the education sector has a social dimension but there is also respect for the basic principle of franchising, i.e., brand name, know-how and assistance. Concerning brand name, a parent shared with us the following: “brand name is very important for me. It […] helps me to measure the level of the school services. […] In addition, when my children see TV advertisements about their schools, they get excited. I think the brand name has many positive impacts.” In the case of know-how, a franchisee explained to us that “they [i.e., franchisor staff] offered [him] various sessions of training and workshops to learn know-how of the network. They have a special training. All franchisees have to attend an extensive initial training of about two weeks.” In terms of assistance, a franchisee recognized that “[he] had no experience in the education business. [His] franchisor and his staff shared with [him] all kinds of information about how to start a school. They visited [his] location and suggested [that he] offer[s] small classes at the start. They helped [him] in hiring [his] principal. Until today, [he is] in touch with them regularly. They send [him] monthly lessons and activity plans and [he] just [has] to follow their guidelines.” He concluded that with this assistance it is “easy for [him] to run [his] business.” (A franchisee)
Other key elements of franchising are also present in these educational chains. Interviewees stressed the quality of the provided education. One parent explained that “quality of education firstly depends on quality of teachers and secondly depends on establishing appropriate monitoring of the overall system.” He believed that “chains concentrate on both aspects” and he considered that “teachers are well-trained and children have access to all basic facilities.” Moreover, the price charged by the franchised schools is considered affordable for most people. As a parent said: “Fees in franchised schools are low and quality of education is satisfactory. For the parents who cannot even afford to pay these reasonable fees, franchisees offer them a fee reduction. Personally, I am satisfied with the fee structures of the school and also with its services.” As far as uniformity is concerned, franchisors pay attention to it not only in terms of the buildings and equipment, but also in terms of teaching, using, according to an employee, “the same books and even the same lessons across Pakistan.”
Finally, the business focus of these chains has been pointed out especially by franchisees who mentioned 1) advertising that has attracted them (“I watched a [Brand Name] advertisement on television. I found it very interesting that a new concept had started in Pakistan, so I decided to get initial information about it. When I got information on it, it attracted me and finally I decided to buy a [Brand Name] franchise.”); 2) the fact that franchisees are sometimes investors (“Most of the time, franchisees are not running their schools. They hire principals. I have only seen two [school campuses] where franchisees are operating them themselves.”); and 3) the objective of making a profit (“I think it is more about making a profit. We concentrate on profit. Obviously. It is natural. We have to focus on our margins first.”).
The perspectives and challenges for franchisors and franchisees in the education sector
The perspectives for these franchise chains seem endless as highlighted by our respondents: “Franchising is an interesting concept for everyone. It is successful in Pakistan. I think other countries that are facing problems in terms of education should also adopt franchising. I am sure these franchised schools will grow and never close” (a student); “Franchising will grow because it is a solution to our social pain. Our government must support these educational groups because they have experience and potential for the future. They must be encouraged to serve our society” (a parent); “The franchise sector is progressing in Pakistan. I expect that the development of the education sector in the future [will be] through franchising, because franchised schools offer low fees, scholarships and quality in educational services, which [the] government is unable to offer” (an employee); or “Franchising should grow in the future. It has a great demand because middle and low-income classes have no other solutions. No one is expecting an improvement in public schools. The private sector is out of reach for most of us. Then, who will deliver education to our children? There are only franchise networks that are successful in providing education. This business model is already successful in the market and it is now widely accepted by our public” (a franchisor).
The challenges for these chains are quite similar to those faced by franchisors in more traditional sectors, i.e., adapting the concept to the local market, facing increasing competition and selecting the right franchisees and the right teachers. Another particular challenge is to find the balance between commercial and social goals. The social goals should not overshadow the basic principles of franchising and the business-orientation. Franchisors, as well as franchisees who want to succeed in the social sector, have to strictly apply and respect the principles of franchising if they want to achieve their social goals in a sustainable way and with a long-term perspective.
Short Bio Rozenn Perrigot
Dr. Rozenn Perrigot is an Associate Professor at the Graduate School of Management (IGR-IAE Rennes) – University of Rennes 1 – France where she is also the Director of the Center in Franchising, Retail & Service Chains whose aim is to bring students, researchers and professionals in franchising, retail and service chains together around issues concerning the sector and to generate synergies using a global approach (professions, disciplines and countries). The main activities of the Center – supported by corporate partners – are: education (among which a MSc Degree), research and interactions. Rozenn has published over 30 papers in international peer-reviews using Business approaches (entrepreneurship, management, marketing, organizational behavior, strategy…), Economics approaches (industrial economics, digital economics) and Law approaches (competition law, contract law). She has presented over 60 communications at international conferences on franchising. She is the Secretary of the International Society of Franchising. She has also led several research contracts for the French National Research Agency, the French Franchise Federation, etc. Her recent research deals with the following aspects of franchising: micro and social franchising, franchising in Africa, organizational forms (franchising, company ownership, plural form, multi-unit franchising), chain management (organizational and technical know-how, franchisor/franchisee relationships, franchisee behavior), chain marketing (communication on websites, on social media, on activities linked to corporate social responsibility, customer satisfaction), chain development (franchisor communication to attract new franchisees), chain strategy (E-commerce, internationalization), unit and chain performance (financial and non-financial performance, efficiency, survival/failure), conflicts within chains (European regulation, risk of reclassification of franchise contracts).
Many developing countries face large and growing youth bulges, and with youth unemployment rates prevailing at twice that of the general workforce, there is a pressing need for new job creation. Across the world, 600 million youth will be competing for 200 million jobs in the next decade, and this “demographic time bomb” is not only threatening economic well-being but also generating concern for the potential social unrest it can bring about in countries with weak institutions.
Employing the youth bulge means creating jobs. With nine out of ten jobs created in the private sector, it is clear that private business will need to drive this growth. Franchising and micro-franchising are vehicles that can help bring about increased employment and support entrepreneurship. Currently, the business model of franchising is widely utilized in more developed countries, but very few chains have expanded into frontier markets. There is a clear opportunity to leverage this business model to bring about job creation in the developing country context.
What is franchising?
Franchising is a way to expand businesses through a licensing relationship. Typically, a business (franchisor) can grant a license to a third party individual or company (franchisee) to offer products or services under their brand, and offer them training and support throughout the process. The model has seen great success in the United States, where franchises currently support one in eight jobs. Some of the well-known and largest franchises in the world are fast-food restaurants and hotels from the United States, including McDonald’s and Marriott International.
Micro-franchising, a sub-set of the franchising concept, refers to smaller-scale, and even single-person franchises that distribute standardized branded products and services.VisionSpring is one micro-franchise that typifies this idea in the developing world: it provides its “vision entrepreneurs” with reading glasses, eye charts, and a few days of training. These micro-franchisees then go from village to village selling eye glasses to remote populations that would not have been able to access the product. This is a very much a win-win situation, as the business gets a share of the profit, employs local populations, and provides needed services to remote areas.
Franchising is a means for young, energetic people to create economic activity without a great deal of experience or capital. To be a successful franchisee requires individuals that are hardworking and have the ability to follow through with implementation. These entrepreneurs do not need to face the difficulties of starting a business from scratch but still have an opportunity to run a successful enterprise. Additionally, micro-franchising can expand to rural and hard-to-reach consumers that have largely been ignored by companies due to high delivery costs and their low purchasing power. Micro-franchising can bridge this gap in the distribution chain while creating employment and economic activity.
Micro-franchises could extend services and employment opportunities to otherwise hard to reach markets.
There are existing examples of franchised businesses driving job creation and social change in the developing world. Living Goods, a micro-franchise based in Uganda, brings sanitary pads, diapers, basic antibiotics, soap, and vitamins to households at below-market prices. In Ghana, micro-franchisees from Fan Milk Ltd. are peddling dairy and milk products to remote areas on bicycles. In India, an enterprise called Drishtee provides its entrepreneurs with a laptop and fingerprint scanner to provide basic banking services to people in rural northeastern provinces who would otherwise need to travel for hours to reach a physical bank location.
Experience has demonstrated that generating jobs from the military or government ultimately leads to economic stagnation. Creating employment through multinational corporations is important, but can fail to reach the “little guys.” Franchising and micro-franchising provide the opportunity to leverage the existing entrepreneurial energy among youth in society to reach more marginalized populations.
by Blake Martin
The International Franchise Association is laying the groundwork to make a substantial difference for those in greatest need (at the Base of the Pyramid) all around the globe. The Franchising in the Social Sector Task Force meeting at #IFA2016 on Saturday, February 20 was a huge success. The room was packed with both seasoned and new Task Force participants in attendance; all interested in using their franchising experience to help socially-conscious organizations expand their health care, clean water, education, nutrition, agriculture and other products and services to people at the Base of the Pyramid consistently and sustainably.
The Task Force which meets monthly via conference calls, piggy backs on the IFA Annual Convention to bring old and new participants together for updates and education about this sector. Progress reports were presented by several members:
Posts on our blog are contributed by a team of professionals dedicated to developing valuable resources for the Social Sector Franchising community.