What's in Store? How social-sector franchising can work

by Nancy Weingartner

“I miss my country. I want to come home,”
D.C. resident John Mwangi lamented after he fed a gentle giraffe named Laura a handful of pellets.

Pictured left:  Maasai tribe members in traditional dress are part of the tourist industry in Kenya. Here, two warriors pose with coffee exporter John Mwangi, who was raised in Kenya before moving to the U.S.

Mwangi was born and raised on a coffee farm in Kenya, but educated in the U.S. Now a coffee exporter living in the D.C. area, he was one of the hosts for my Kenyan coffee tour, and had graciously agreed to accompany me to some of the local sights while we waited for Dunn Bros Coffee CEO Chris Eilers and VP of marketing Mark Christenson to return from the first leg of their coffee pilgrimage to Ethiopia and Uganda.

What’s so startling about Mwangi’s sentiment at the giraffe park is that we had just left Kibera, a 1.5-square-mile slum that houses an estimated 1 million people, outside Nairobi, the capital of Kenya. It’s hard to describe the magnitude of the slum, which is row upon row of mud and rusted, corrugated-metal sheds that serve as both tiny, cluttered shops of mismatched merchandise as well as homes. The pothole-infested dirt roads are littered with garbage that turns into a slip-and-slide when it rains. Men, women and children are everywhere, standing in doorways and on dirt porches, cooking alongside the road, walking everywhere and nowhere.

I wanted to visit Kibera because it houses two CFWshops locations, the social-sector franchise profiled in our May 2007 issue. The Child & Family Wellness shops are rural healthcare clinics and pharmacies that provide medicine to a population that can’t trust the government’s drugs not to be counterfeit. Franchisees are entrepreneurial nurses, and for the most part the shops operate like typical franchises, with one noticeable exception: “We don’t turn away people” who can’t pay, says Spencer Ochieng, the country program manager.

Franchisees use their “own local judgment” to decide who can afford to pay for services on the spot and who needs to be extended credit. There is no health insurance, therefore payment is out of pocket in an area where some people are living on less than $1 a day. But they can afford to pay, Ochieng stresses. “In other areas, the pockets are much heavier, then you don’t give credit,” he adds. He tells about a franchisee in a more “suburban” location who sends patients who come with empty pockets home to get money before treating them.

“You have to be very wise,” says Dorah Nyanja, the franchisee of the first CFWshop we visited in Kibera. “On a weekly basis we know the outstanding balance; you know who pays and who doesn’t.” When someone who owes money shows up a second time: “You pretend you don’t remember they didn’t pay last time,” she adds.

By noon on the day we visited, Nyanja had already seen 23 patients, only five of whom she said paid–and even those five didn’t pay the full fee. The problems she treats include malaria and diarrheal diseases, along with what she refers to as opportunistic diseases, infections that grow in people with compromised immune systems. Clean water for washing or cooking is a rarity, as is proper sanitation. According to one report, there is one toilet for every 500 to 1,000 people in Kibera, therefore necessitating the use of the “flying toilet”–defecating into plastic bags and then tossing them as far away from you as possible. This results in the bags breaking and fecal matter getting into the water or splattered on pathways and picked up by bare feet. AIDS and HIV-related cases are also prevalent in all of Kenya, but nowhere more so than in Kibera.

Nyanja has her work cut out for her. She’s been a franchisee for seven years, after finding work at a hospital repetitive. She commutes to Kibera, works 12-hour days and sees about 65 patients daily. While she makes her home outside the community she serves, some residents of Kibera actually choose to live there. They work in the city, then return to sleep on dirt floors at night. It’s their community, the only home they’ve known, Ochieng explains.

It’s also a community with few secrets, since people live just a few feet away from each other behind thin walls. Which is how the franchisees know so much about their patients’ finances.
In order to ensure the brand stays strong, Kenyan franchisees need to be both empathetic and give good service. Because it’s a franchise, there are standards and procedures, and people are starting to trust the brand.

At a second CFWshop a few blocks and several tens of thousands of people away, we see an unusual sight–a father who brought his child in for treatment. It’s usually the women who are the caregivers.

Nyanja says that when a man comes to the clinic, it’s because he’s in dire need of care. The clinics are known as mother/child centers, since they are the most vulnerable population. But when she treats a man, Nyanja says she knows he can then go back to work and therefore pay her fee.

In a 2008 documentary for PBS, the show’s host posed the question: “Can the fast-food business model save lives in Africa?” But those in franchising know that statement is an affectation. Franchising is much more than fast food. As Michael Seid, a consultant helping design the franchise program and a board member for the  shops’ parent organization, the Healthstore Foundation, said in the 2007 Franchise Times article about his trip to Africa: “This is …commercial business-format franchising applied to the human condition.” The difference between an overcooked french fry and selling bogus drugs, however, is worlds apart. “In Africa, ‘mistakes equal a coffin,’” Seid said. (OK, so can E. coli and mad cow disease, but let’s not go there.)

The reason franchisees stay in business, not to mention the franchisor, is because it’s part of the HealthStore Foundation, a 501(c)3 charity, started by Scott Hillstrom, an attorney and businessman in Minneapolis. London-based Gunther Faber, a former vice president for GlaxoSmithKline, an international pharmaceutical company, has come on board as CEO. In addition to his impressive Rolodex and 29 years of work experience in Africa, Faber has a passion to see sustainable health care become a reality in Africa. He says that when he received the call from a headhunter about the CEO position, his reaction was, “We may have just found the Holy Grail” to supply drugs to the masses. He saw it as a “magical business opportunity, and then came the economic meltdown.”

He had envisioned utilizing social venture capitalists, but the foundation’s 3-percent return on investment wasn’t enticing enough. “We have to rely on donor money,” Faber says. But, the good news, he adds, is that the nurse/franchisees do make money. The foundation currently has a $1.5 million grant from his old pharmaceutical company to develop 60-plus CFWshops in Rwanda.

Other good news is that the International Franchise Association has approved a task force to investigate social-sector franchising, such as the Healthstore Foundation.

Another model

At a recent fund-raising event for CFWshops in Minneapolis, I sat next to Kojo Benjamin Taylor who is in the process of setting up a franchisable healthcare model in Ghana, his home country, and Uganda. His 2-year-old model, MicroClinic International, works with the governments and other sources to pay for the care patients receive at the clinics, in a program similar to health insurance. He claims people earning just $1 a day can’t afford health care, much less, preventive care.  MicroClinics are run by physician assistants, Taylor says, who also work to prevent the short list of diseases that cause 70 percent of the childhood illnesses and deaths in Africa.

Also at the event, which was awareness-raising as well as fund-raising, I met David Jones, who is helping design a fund-raising program for Healthstore. He founded Geneva Global in 1999, which he has since sold, a philanthropic company that researched “global south organizations.” “I was most impressed with the Healthstore Foundation’s work,” he says. The quality of the health care and the “pure medicine it delivered because of its franchise supply chain was superior in its field.”

Half-full glass?

Kenya seems to be shedding its past, which was the reason for our coffee exporter’s optimism. Next door to Kibera, the government is building high-rise apartment buildings, and a traffic-jammed main artery in the city is being widened to eight lanes. A blip on our U.S. economic impact radar, but the beginnings of progress and a middle class in Kenya.

Mwangi told me to look at the faces of the people we drove past. I noticed smiling faces; clean, Western-style clothes; neighbors talking to each other and working side by side to sell their hodgepodge of goods. Children laughed and played–the only visible difference from American kids is their backdrop.

“Poverty is not something that stops them from feeling good about themselves,” Mwangi says. And perhaps using franchising for social-sector projects is something that will make Americans feel good about ourselves.

This article was reprinted by permission of http://www.franchisetimes.com

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