From RNews

Reacting to the Statistician-General of Statistics SA Quarterly Labour Force Survey that shows unemployment rising to a 14-year high with 27.1% of the population without a job, the Franchise Association of South Africa (FASA) believes the franchise sector, which contributes 11.6 percent to the country’s GDP and employs over 400 000 people through its 757 franchise systems and their 35 111 franchise outlets, can play a key role in creating the necessary jobs to grow the economy through innovative venture creations.

With the gap between the unemployment rate envisaged by the National Development Plan (NDP) and the current rate widening and with Government’s goal of 5 million jobs by 2020 fading fast, the only solution for real economic growth to happen, is if 90% of South Africa’s jobs come from small business.

Says Tony Da Fonseca, FASA’s Chairman for 2017/2018, “Solutions to the employment challenge need to be tackled as a matter of urgency. We as the franchise community have the business format expertise to assist in the establishment of new franchises in a variety of sectors not yet franchised – be it in agriculture, manufacturing or even in government’s social services. But we need to mobilise business and industry leaders, government and civil society to play a part in freeing up economic regulations and find creative solutions to allow entrepreneurship to flourish.”

It has been proved time and again that small and medium enterprises (SME’s) are the backbone of every economy around the world. According to Vera Valasis, Executive Director of FASA, who represents South African at the World Franchise Council, “small businesses are creating two thirds of the jobs in developed countries and a large percentage of those small businesses are through the franchising business format. There is no reason why South Africa cannot drive the same growth through franchising that countries such as Brazil, China and India have shown.”

Many of the Franchise Association’s members are already exploring new ways to empower small businesses and entrepreneurs in bridging inequality, creating prosperity and employment. 

According to Anita Du Toit, Director at Franchising Plus, franchise consultants who have pioneered the piloting of social franchise projects, there should be more programmes with a focus on skills development and that certain skills could be turned into sustainable micro franchises, thereby helping these franchisees to earn a living and removing them from the job seeking market.

​“We have always said that painters, tilers and such trades could be franchised under the umbrella of a big retailer or paint manufacturer.  This would solve the problem of consumer perceptions of the credibility of independent contractors while also ensuring a central referral system, ongoing training and support and helping such tradesmen to earn a good living as a small business operator.  The focus should move from job creation to the creation of sustainable small businesses. Franchising offers a mechanism to enable this.”

Kobus Oosthuizen, former Chairman of FASA and MD of SA Franchise Warehouse, has, for the past few years worked closely with government on several initiatives to stimulate entrepreneurship, skills transfer and job creation.  In 2014, an initiative from the Jobs Fund, and in conjunction with Business Partners, resulted in just under R100 million advanced and more than 600 jobs to be created by the end of 2017.

The second round of an emerging franchisor initiative spearheaded by the Department of Small Business Development’s Micro Franchisor Development Project will see the number of businesses replicated total twelve. “There is no doubt that these projects” says Kobus Oosthuizen, “will go a long way to enhancing the reputation of franchising as an enterprise development mechanism, whilst playing a valuable role in reviving township economies, creating new businesses, passing on important skills and more importantly, creating much needed jobs.”

Tony Da Fonseca, MD of the OBC Group and Chairman of the Franchise Association of South Africa (FASA), believes that the franchise sector is perfectly poised to take the lead in transforming the business landscape and make an even bigger contribution to entrepreneurship, skills transfer and job creation.

“As a group of progressive franchise entrepreneurs, historically and against the odds of sanctions, we created a franchise sector that today boasts over 90% home-grown concepts. Sustainable economic transformation can become a reality only if the public and the private sector come together to optimise limited resources and utilise available opportunities to best effect,” says Da Fonseca.

The franchise community will gather at the annual FASA Convention sponsored by Absa to network with industry stalwarts who will be sharing their leadership styles and how they are tackling the challenges in franchising.

​The Convention takes place on Thursday 29th June at the Kyalami Grand Prix Convention Centre from 08h00 to 16h45 ahead of the Franchise Business Festival which takes place from the 30th June to the 2ndJuly – showcasing franchise and business opportunities.  For more information visit www.fasa.co.za or email fasa@fasa.co.za

​Dr. Rozenn PERRIGOT
Associate Professor
Director of the Center in Franchising, Retail & Service Chains
Graduate School of Management (IGR-IAE Rennes)
University of Rennes 1

EXECUTIVE SUMMARY

​In the context of the growth of franchising in the social sector, and more specifically in the health care sector in Africa, it is important to understand how franchising can contribute to the development of the sector, from the quality of treatment and services offered to the performance of the companies.
This CFW network case study’s objective is to understand and assess:

• CFW activities and operations
• the CFW franchise business model
• CFW challenges and perspectives

​The research questions addressed in this study are the following:

• Who are CFW customers and how do they perceive CFW?
• How does a CFW clinic work?
• How does CFW use the core elements of franchising in managing its network?
• How important are the relationships and satisfaction within the CFW network?
• How does CFW develop its network of clinics?
• What are the challenges and future prospects for CFW?
• What recommendations are there for CFW?

The methodology of this exploratory study is qualitative and based on:

• a series of in-depth interviews by Skype and/or phone with 19 people as follows: seven people from CFW headquarters, five CFW franchisees, one employee of a CFW franchised clinic, five customers of several CFW  clinics and one prescriber, a professor at a school who is also a CFW customer
• access to internal documents such as the franchise agreement, its amendments and exhibits, the Franchise Operations Manual and the CFW outlets compliance code, as well as the Compliance Evaluation Scorecard
• secondary data from CFW websites and papers and other websites dealing with the case of CFW

This multi-level approach involving people from headquarters, franchisees, an employee of a clinic, 
customers and a prescriber has allowed me to gain a  global overview of CFW activities and 
operations, the CFW franchise business model and CFW challenges and future prospects.

The following findings and recommendations have emerged from this study:

Valorizing CFW organizational know-how:  In addition to the know-how that has been implemented and codified by CFW before being transferred to the franchisees, CFW has important organizational know-how at the headquarters’ level. Specifically, I refer to the codification of the business know-how, franchisee training, the audit of the clinics and the supply of medicines. Another example of relevant organizational know-how of CFW is the CFW Outlets Compliance Code that is “a code for the Field Officers on how to handle non-compliant CFW franchisees. It defines contraventions of specific CFW franchise standards so as to clarify the relevant steps an officer should take.” It would be appropriate to proceed to a detailed audit of all this organizational know-how and valorize it:

• internally from the perspective of continuous improvement of the practices
• externally with the franchisees to remind them about the expertise they indirectly benefit from
• externally with franchisee candidates to encourage them to join the network

​Reinforcing The CFW brand image: The CFW brand image could be reinforced through implementing different actions such as:

• the continuation and reinforcement of outreach activities, e.g., in schools, local communities and churches to favor the word of mouth effect and generate more traffic to the CFW clinics
• an increase of communication and advertising of the CFW brand in the communities. The interviewed customers seemed to be committed to the franchisees themselves, their welcome, their competences, their counseling, before being committed to the CFW brand. Customer B talked about the franchisee as her “mother,” and the clinic as her “home.” Customer C mentioned that the clinic is “like her family.” The commitment to the CFW brand could be progressively reinforced to underline the quality of the health care and medicines. Flyers for advertising local clinics could include some information on the CFW network
• the insertion of the CFW logo and graphic charts on all internal documents, e.g., the CFW Outlets Compliance Guide

Maintaining close relationships within the network: Relationships within the CFW network should be maintained and perhaps intensified because interviewed franchisees and the employee seem to appreciate sharing advice, ideas, best practices with the headquarters’ team, for instance, during field officer visits or among themselves during meetings. Franchisee C compared her clinic and the CFW network as “a family.” Employee A who “feel[s] his future in CFW” mentioned the “need to improve relationships [...] and the need to know each other.” Strengthening relationships is a way to underline the CFW assistance provided to the franchisees, reinforce the CFW culture around its values and make the adhesion of the franchisees to the new CFW development plan easier.

​Considering the evolution of the CFW concept: In terms of evolution of the CFW concept, it appeared during the interviews that there was an interest in expanding the services offered by the CFW clinics, as well as opening hours of the clinics. First, according to CFW customers, services and facilities provided by the CFW clinics could be expanded. Interviewees mentioned specifically vans, deliveries, laboratories as well as adding wards for in-patient care. On the one hand, this would be a way to better meet customers’ demands and, on the other hand, a way for the franchisees to develop their activities and then make more money. Second, two customers who would like 24H/24 service also suggested expanding the opening hours of the clinics. The associated issue would be the cost associated with expanded opening hours.

Better assessing customer needs and expectations: In addition to this exploratory qualitative study, a questionnaire-based survey given to customers would be very useful in order to assess customers’ needs, expectations and also satisfaction.

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)
Online ​

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.

REGISTER NOW

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. 
​
WATCH THE RECORDING

DOWNLOAD THE POWERPOINT PRESENTATION

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.

WATCH THE RECORDING

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.

                                              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:
 

1. The food must be donated to a nonprofit organization in good faith.
2. The donated items must be apparently wholesome food.
3. The food must be distributed by the nonprofit to needy individuals who may not pay for it.
4. The food must meet all federal, state, and local quality and labeling requirements; if labeling requirements are not met, the food must be reconditioned to meet them before donation.

 
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

• We have grown from 2 franchises in 2 countries 20 months ago (January 2015) to 140 new business launches (30 franchises and 110 microfranchises) in 3 countries and are now launching over one new business per week.
• About 12 million liters (>3 million gallons) of drinking water has been served to approximately 300,000 consumers and we have created over 300 jobs through our franchises, many of these filled by women and youth. 
• Jibu Rwanda has already broken even against operating expenses and is on track to be profitable soon, 18 months ahead of schedule. We continue to stand amazed at our franchisees. 

What’s coming

• We will soon pilot the introduction of new products and services at our storefronts. Our vision has always been to leverage the high foot traffic our water generates to sell other impactful products and services that meet infrastructural needs for the underserved.
• We are on track to test a ‘Regional Developer’ middle-tier in our model soon, probably in Tanzania. From inception, we have planned to replicate our franchisor function by licensing others to open up new regions using the Jibu blueprint as soon as we were confident we had a reproducible model. If successful, this will be a great multiplier for our pace of growth. 
• Jibu has been incredibly fortunate to attract top-notch talent. New team members Mark Mutaahi (Uganda Country Director), Nenneya Shields (Director Impact and Learning), and Teo Lamiot (Associate Impact and Learning) are already making significant contributions. Mark is setting a new standard for what we need in a Country Director. We know that we have been making great impact with underserved populations, but haven’t been great at capturing and documenting this impact- Nenneya and Teo are masterfully leading that charge for us, as well as refining our training materials.  

Growing pains

• We had to make significant and painful leadership changes in Rwanda recently. In spite of our management stumbles, the franchises amazingly have continued to thrive well beyond our expectations- we are very fortunate to have such great franchisees and a ripe market. So, we are now searching again for a Rwanda Managing Director– do you know anyone looking for a very cool and meaningful position like this?
• In an interesting contrast, we think we now have a top notch leadership team in Uganda and mature systems– but water sales have not been increasing as proportionally as we had expected. However as we have been emphasizing to the franchises that they really are the owners of their businesses!, this has fostered a more energized and creative sales culture among them. There now appears to be a positive same store sales trend beginning to occur.
• In Kenya, we had to re-learn (again!) that we need to launch a company-owned store first when opening a new market to ensure proper customer-feedback loops and to hammer out inevitable operational challenges.
• We continue to learn how to contextualize our model to the subtle differences between countries, and navigate the tension between what is negotiable and non-negotiable in our model.

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. 
Money news
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).