Scaling Social Enterprises through Franchise Models: Rethinking Social Franchise Agreements
By Deborah Burand, David Koch, and Katy Yang
This detailed whitepaper examines why social enterprises seeking to scale up might (or might not) opt for a franchise model, vs. alternative growth strategies. The paper also examines how to create durable franchise relationships that advance the desired social and environmental impact, as well as financial objectives, while aligning the interests of franchisors around these double bottom lines (social and financial returns). Many useful examples are presented along with a critical analysis of pros, cons, and trade-offs, as well as “how to” guides on how social franchises can develop and negotiate franchising contracts. The paper also covers development of operations manuals for social franchises, which may differ from manuals for commercial franchise businesses. A consistent and notable theme throughout the piece is the centrality of alignment of interests and commitment to mission between the franchisor and franchisee, and recognition of the reality that strength in those relationships is critical to the long-term success, growth, and sustainability of both the franchise network and the franchisee's particular operation.
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