FRANCHISING IN THE HEALTH CARE SECTOR:THE CASE OF CFW IN KENYA

​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.

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