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:
User experiences with clinical social franchising: qualitative insights from providers and clients in Ghana and Kenya
By Maia Sieverding, Christina Briegleb and Dominic Montagu from BMC Health Services Research
Clinical social franchising is a rapidly growing delivery model in private healthcare markets in low- and middle-income countries. Despite this growth, little is known about providers’ perceptions of the benefits and challenges of social franchising or clients’ reasons for choosing franchised facilities over other healthcare options. We examine these questions in the context of three social franchise networks in Ghana and Kenya.
We conducted in-depth interviews with a purposive sample of providers from the BlueStar Ghana, and Amua and Tunza networks in Kenya. We also conducted qualitative exit interviews with female clients who were leaving franchised facilities after a visit for a reproductive or child health reason. The total sample consists of 47 providers and 47 clients across the three networks.
Providers perceived the main benefits of participation in a social franchise network to be training opportunities and access to a consistent supply of low-cost family planning commodities; few providers mentioned branding as a benefit of participation. Although most providers said that client flows for franchised services increased after joining the network, they did not associate this with improved finances for their facility. Clients overwhelmingly cited the quality of the client-provider relationship as their main motivation for attending the franchise facility. Recognition of the franchise brand was low among clients who were exiting a franchised facility.
The most important benefit of social franchise programs to both providers and their clients may have more to do with training on business practices, patient counseling and customer service, than with subsidies, technical input, branding or clinical support. This finding may lead to a reconsideration of how franchise programs interact with both their member clinics and the larger health-seeking communities they serve.
Clinical social franchising is a rapidly growing model for delivery of services in private healthcare markets, with 83 programs in operation or planning to launch as of 2013 . Social franchises engage private providers in a contractual arrangement to provide standardized health services under a common brand name [1,2]. Participating providers are offered services such as training, branding and commodity supply, in exchange for which they are expected to provide agreed-upon services, often under certain quality conditions [3,4]. The driving hypothesis behind social franchising is that a network operating under this type of contractual arrangement can deliver improved health services in terms of access and quality . At the same time, providers are expected to benefit from the technical assistance provided by the franchisor, as well as to benefit financially from branding and increased client flows [3-5].
Despite its expanding scale, recent reviews have found limited evidence for the impact of social franchising in areas including health outcomes, quality, utilization and access to family planning services [2,6]. Less attention has been given to provider and client experiences with or perceptions of franchising, factors that are also likely to influence the impact of this delivery model. The few studies that have addressed provider motivations to join or maintain membership in a franchise network have found that providers cite a number of factors, including access to medicines [7-9], social responsibility [7-9], technical improvement [7-10], improved client relationship management  and opportunities for networking [7,9]. There is limited evidence regarding the effect of franchising on service utilization . However, one study found that franchised facilities experienced higher client volumes, suggesting that this could be a financial motivation for joining the network . In Myanmar, franchised providers experienced increases in income , although another study on the same network found that finances were not a main motivation for joining the network and providers were concerned that their revenues might decline due to network limits on profit margins .
While most research on providers’ motivations to join a franchise network is limited to Asia, franchising has been found to increase client satisfaction in several contexts [4,5,11]. Quality of care and a positive provider-client relationship have been found to be important to clients’ choice to attend a franchised provider in Asian contexts [5,8] and among youth seeking family planning services in Kenya . General literature on client satisfaction with private sector health facilities in Kenya and Ghana, our two countries of interest, has found that interpersonal treatment by providers [13,14], the physical environment of the facility [13,15], distance  and wait time [15,16] are important considerations for healthcare users.
Evidence on provider and client perspectives on social franchising in Sub-Saharan Africa, however, is particularly limited. Given that there are at least 43 networks operating in the region , this is an important gap in our understanding of social franchising. The objective of this study was to understand experiences with clinical social franchising, from both the provider and client perspective, in the context of three large networks affiliated with international non-governmental organizations (NGOs) in Ghana and Kenya. On the provider side, we aimed to understand perspectives on the benefits and challenges of participating in a social franchise network. From the clients’ perspective, we aimed to understand factors influencing the choice to attend a franchise facility as compared to other healthcare options.
Please click here to continue reading
Re-imagining international development the way Steve Jobs re-imagined technology
Steve Jobs is celebrated for pushing boundaries - the boundaries of societal norms and the boundaries of individuals willing to put principles over personalities and persevere through uncertainty and/or adversity - in order to achieve something larger and more important than self-fulfillment. His vision involved the merging of previously separate disciplines - technology and the humanities - to create something altogether new.
Something different. Something better.
In recent years, the international development space is experiencing a similar merging of disciplines - commercial business with social services - to address some of the still-unsolved problems that plague society today. While there are an increasing number of social enterprises meeting social needs, most are operating at a scale far too small to make a meaningful dent in global problems.
The international development community is making important strides toward supporting the growth of successful social businesses through the establishment of “incubators” that support businesses in the early startup phase; and “accelerators” that address organizational, operational, and strategic barriers to growth at later stages. Indeed, a recent Forbes article counted some 3500 social business incubators and/or accelerators designed to support the growth of social businesses. Both incubators and accelerators are important resources that can help firms grow into well-established organizations that contribute to local economies and deliver social impact to the communities they serve. There remain questions, however, about how well they workand whether these efforts are really enough.
Is a successfully “incubated” and “accelerated” small or medium social enterprise enough?
This article suggests that when global development is the goal, it is not enough to settle for successfully operating small or medium enterprises; and that the development community should also invest in strategies that can help those proven social businesses further expand through models such as franchising, particularly “business format franchising”, that have proven themselves in the commercial sector.
In this way, social businesses can scale in the same way that commercial businesses have scaled thus resulting in a) more wealth creation for the local business owners; b) more jobs for people in communities where businesses are located; c) more social impact in more communities that are served by these local social businesses; and d) higher, consistent, and sustainable quality standards across a range of industries based on the requirements of larger branded enterprises.
This approach should also be interesting to those primarily concerned with promoting economic development in low-income communities. Franchising of any type of business, social or not, has the power to transform economies because it both directly and indirectly creates business ownership and jobs in the communities those businesses serve, thus building a middle class. Franchising is one of the fastest growing segments of the global economy. Thousands of franchisors and millions of franchised businesses create millions of jobs globally. In addition, its economic output represents a significant share of national GDPs, on average just over 4%. Studies show that in the US alone, 780,000 franchise establishments across 295 industries support nearly 9 million direct jobs and $890 billion of economic output for the economy. On average, one in four franchises in any given country outside of the US are foreign-based. This suggests that consumers are open to foreign products and that there is great potential for export of domestically developed concepts regionally and globally.
What makes franchising such a promising model for the international development community?
Franchising works on many levels to drive economic development and social progress. A recent investigation of franchising’s role in economic development concluded that franchising drives economic development in four key ways, the first of which is efficiency. Franchising generates efficiencies in markets by establishing systems (both internal and external to the franchise business) and know-how (e.g., business and management skills) that are proven in the global marketplace. Second, franchising stimulates competition, which in turn leads to higher quality products and services, lower costs, and more market segmentation that enables a greater portion of society to access the market. Third, the effects of franchising on customer service and product quality improve consumer welfare even if the service being franchised is not a “social” business. For example, in the restaurant industry franchising can raise standards of food products through sourcing, preparation, and hygiene requirements. There is also a built in process for educating consumers and further driving demand for higher quality products and services. Fourth, franchising provides opportunities for business ownership, which is widely regarded as an important means to achieving economic growth. It is also a powerful vehicle for imparting knowledge and skills that entrepreneurs need to succeed in business, which has a positive spillover effect on quality and quantity of locally -owned businesses beyond franchises.
Franchising can further contribute to a country’s economic development by facilitating its ability to develop exportable goods and services - i.e., home-grown franchises that have regional or global appeal. Many think of franchising as the export of US culture and that its sum effect is more destructive to local culture than it is helpful to the local economy. In fact, that trend is changing, and more franchises every year are home-grown and even being exported to the US; 5% of franchise brands in the US are imported. South Korea is the second largest developer (behind the US with 3,636 domestic brands) of franchise brands with 2,584 locally developed franchises. Other countries leading the way in domestic franchise development are Taiwan (2,141 domestic brands), France (1,547 domestic brands), Mexico (1,120 domestic brands), Australia (998 domestic brands), and Philippines (975 domestic brands).
In sum, franchising works so well in so many diverse cultures because it is adaptable, scalable, and has proven to be sustainable over long periods of time. Franchising is highly effective at transferring entrepreneurial skills and best practices around the world because of its adaptability to differing cultures and economic requirements. Because of its focus on and enforcement of brand standards, franchising has created secondary benefits in establishing supply chains and by bringing best practices in business to new economies with the resulting effect of improving living standards across the globe.
How does franchising facilitate business expansion?Franchising is a powerful growth strategy that has proven itself as one of the most effective ways for a brand to achieve global coverage. Franchising solves multiple barriers to business expansion for entrepreneurs. For example, it provides a mechanism for them to access three critical types of capital needed to successfully expand: 1) financial; 2) managerial, and 3) local market insight. The franchisor uses the franchisees’ funds to open new locations, the franchisees’ people to manage the site, and the franchisees’ knowledge of local markets to identify site locations, secure local suppliers, and continually adapt to evolving market conditions. In the social sector, social franchisors leverage resources from the philanthropic community to provide the local funding necessary for the local entrepreneur to invest in their franchised businesses.
Franchising also solves barriers that many local entrepreneurs face to starting a business of their own. First, it offers benefits of a proven business model and rights to use the procedures and systems that make it so successful. This spares the new entrepreneur time, money, and risk involved when trying to create a successful business concept from the ground up. Second, it offers benefits of a shared brand across multiple locations delivering a consistent customer experience. It also provides a way to rigorously measure output and results at the local level so that the business can be effectively managed. Both of these features make it easier for the entrepreneur to attract and maintain a strong customer base from inception of the business, and enable them to become cash-positive much more quickly than if they were to start their own business with their own brand. Third, it enables them to leverage the power of a large network (purchasing, lobbying, etc.) and therefore get access to things like advertising and supply chains that might otherwise be cost-prohibitive. 
How can franchising change the development landscape?Imagine if added to the list of franchise opportunities being marketed to prospective franchisees (via websites such as franchiseexpo.com or events like the International Franchise Expo) were social business franchises such as Jibu’s water franchise, CFW’s healthcare franchise, One Family Health’s healthcare franchise, SolarSister’s clean energy franchise, Farm Shop’s agro-business franchise, and so on. Then imagine these opportunities being marketed to prospects in the communities that need the services. So, for example, a local entrepreneur in Kenya might be interested in purchasing the Jibu water franchise to operate in her community because she sees tremendous business potential. She may also see it as a way to provide a social benefit to her community. She can get a loan from the bank or start-up capital from investors because they have confidence in the Jibu business model and perceive it as a low-risk investment.
In this way local entrepreneurs, instead of (or in addition to) international NGOs, would take on the role of owning and operating businesses that solve needs in their communities while at the same time creating wealth and jobs that lift those communities out of poverty. This is where the re-imagining happens, and the new and better way of doing international development begins to take form.
How do we make this happen faster?Demonstrating that expansion models like franchising can work in the social sector the same way they work in the commercial sector will lead to the transformative change we are all seeking in international development. We can’t demonstrate it until we try it, try it correctly, and try it a lot. This will require industries that are very different in many ways to come together to share ideas and teach new skills, and ultimately revolutionize our collective thinking and approach to solving social problems in emerging market economies, both domestically and overseas. It is not easy to do this, but if we decide that it is important and make our own personal needs (e.g., for recognition and reward) secondary to our common mission to create a world where more people can live healthy and productive lives, then we can do it.
We have all of the components needed to create this - proven social businesses, local entrepreneurs looking for business opportunities, franchising know-how, existing funds (that would simply need to be diverted from less promising projects or approaches), and plenty of market potential. We just need to connect them more efficiently and effectively. When we do, the resulting effect will be transformative on many levels.
To learn more, please contact Julie McBride (firstname.lastname@example.org) who is leading the effort at MSA Worldwide in partnership with the International Franchise Association’s Social Sector Task Force to identify and connect players in this space - including funders looking for good social investment opportunities, existing social franchisors looking to improve and/or expand to new markets, existing social businesses interested in franchising their concept, and providers of technical assistance and/or products (i.e. franchise management systems, mobile health technology, new diagnostic tools, etc.) that might be helpful to franchisors.
 Acharya, Nish ; “The Results of the First Ever Study of Accelerator Best Practices”; Forbes.com; October 21, 2015
 International Franchise Association (IFA); Franchise Business Outlook; Franchise Economy.com; January 2014
 World Franchise Council Survey on the Global Economic Impact of Franchising; 2015
 Steven C. Michael; “Can franchising be an economic development strategy? An empirical investigation”; Small Bus Econ; 42:611–620; 2014
 World Franchise Council Survey on the Global Economic Impact of Franchising; 2015
Posts on our blog are contributed by a team of professionals dedicated to developing valuable resources for the Social Sector Franchising community.