How Social Franchising Is Bringing Jobs to the Developing World

By Jason Daley for Entrepreneur Magazine

Franchising is a powerful business model capable of efficiently delivering to the masses such varied resources as oil changes, emergency medical care, accounting services and jelly doughnuts. But could it do even more? Philanthropists are considering whether the franchise model can be used to bring vaccines, contraception, clean cooking fuel, food and other basic necessities to people in the developing world. The idea, known as social franchising or microfranchising, is beginning to catch on. After a few years of experimenting, the aid community is refining its approach and is ready to make social franchising a major plank in the way nongovernmental organizations (NGOs) assist the world's poorest regions.

The model is similar to commercial franchising, but the bottom-line goal is not pure profit--although many social franchises do aim to become self-sustaining. Rather, these organizations measure success through the number of people they feed, vaccinate or otherwise serve, and the number of franchisees provided with jobs.

In general, a social franchise, often sponsored by or spun off from an NGO or aid organization (although there are many independent social franchises), creates a network of local entrepreneurs who sell products or services door to door or from their homes. For instance, World Health Partners, a nonprofit launched in 2008 in India, recruits people in remote rural villages with limited access to healthcare. Through cell phones and portable computers, these reps connect their neighbors to a doctor in a larger city for a telemedicine session.

Other franchises offer internet connections or the use of cell phones, fortified dairy products, family-planning materials and even beekeeping supplies. Most social franchises rely on charitable donations or grants to stay in operation, but as the businesses become more sophisticated, many are hoping to reach self-sustainable levels.

Chuck Slaughter, founder of clothing and gear company TravelSmith and an entrepreneur who has helped turn around several international apparel brands, started his social franchise, Living Goods, in 2007, delivering lifesaving products to the poor by harnessing the power of the market. Using what he calls the "Avon lady" model, his crew of franchisees go door to door in villages in Uganda and Kenya, selling basic medicines, healthful foods, high-efficiency stoves, solar lights and other health and safety products.

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