Full Answer
What is a social franchise?
While commercial franchises focus on scaling for profit, social franchises seek to further a goal or address a challenge. “Social franchising essentially takes a page from the corporate world and deploys it for social good,” says Devin Hibbard, co-founder and CEO of BeadforLife and Street Business School.
How do franchises work?
By licensing their knowledge, business model and brand to third parties, franchises expand faster than they could on their own — a trusted tactic that helps countless restaurants, retail stores and service providers grow from regional chains to multinational businesses.
Can social franchising change the world?
What is Social Franchising? Franchising can go beyond cheeseburgers and coffee shops. A growing number of social enterprises believe this powerful business model can help them change the world. Companies use franchising to achieve scale.
Does social franchising improve family planning outcomes?
This brief describes the potential impact of social franchising on key family planning outcomes. It also provides useful guidance on how social franchising can be used to increase access to high-quality family planning products and services.
What is a social franchising model?
A social franchise is a network of private-sector health care providers that are linked through agreements to provide socially beneficial health services under a common franchise brand. 1.
What is the importance of social franchising?
The goal of Social franchising is to exponentially scale the impact of each dollar for donors and impact investors while removing barriers to entry and creating economic opportunity through franchisee ownership and employment.
What is the focus of social franchising?
Social franchises build on commercial franchise strategy to scale proven solutions to societal problems. While commercial franchises focus on scaling for profit, social franchises seek to further a goal or address a challenge.
What are the types of franchising?
The five major types of franchises are: job franchise, product franchise, business format franchise, investment franchise and conversion franchise.
How does franchising impact our society?
Franchisees support communities by strengthening them financially. In cities around the nation, franchises play an integral role in supporting the local economy through job creation and the payment of taxes.
What are the benefits and advantage of franchising?
Advantages of buying a franchise You don't necessarily need business experience to run a franchise. Franchisors usually provide the training you need to operate their business model. Franchises have a higher rate of success than start-up businesses. You may find it easier to secure finance for a franchise.
What are the 3 types of franchising?
There are three main types of franchise opportunities available, these are: Business format franchises. Product franchises, or Single operator franchises. Manufacturing franchises.
What are the three benefits of franchising?
Advantages of franchising your businessGrow your business - franchising your business can be a cost-effective way to grow your business. ... Costs - each franchisee finances their own franchise outlet. ... Easier management - the franchisees also run their businesses therefore reducing the management demands placed on you.More items...
What are 5 characteristics of a franchise?
8 Characteristics of Highly Profitable Franchises1) An excellent location. ... 2) A dedicated, involved franchisor. ... 3) A proven track record. ... 4) Little or no competition. ... 5) Recession-resistant. ... 6) Free of legal entanglements. ... 7) Not afraid of effective change. ... 8) Priced right.
What are 4 types of franchising?
The four types of franchise business you can invest inJob or operator franchise. These owner operator franchises are usually home based, which keeps overheads down to a minimum. ... Management franchise. ... Retail and fast food franchises. ... Investment franchise.
What are the 2 types of franchise?
There are basically two types of franchises. There's Product Distribution Franchising (or what's really called traditional franchising), and there's Business Format Franchising, which most people recognize as franchising.
What are the 4 types of franchise arrangement?
Below are four types of agreements franchised businesses commonly form.Single-Unit Franchise Agreement. In a single-unit agreement, the arrangement grants the franchisee the right to open and operate a single franchise unit. ... Multi-Unit Franchise Agreement. ... Area Development Franchise Agreement. ... Master Franchise Agreement.
How will social franchising help your business or company explain your answer?
Social franchising allows both parties flexibility within their role in the franchise model, while also ensuring the goals, brand and resources from the parent company are fully realised by the franchisees.
What are the reasons why social responsibility and business ethics important in franchise business?
The Bottom Line Socially responsible companies cultivate positive brand recognition, increase customer loyalty, and attract top-tier employees. These elements are among the keys to achieving increased profitability and long-term financial success.
What is the most important element of franchise?
Owning a reputed brand not only makes the brand attractive to franchisees, but also provides respect and authority in the market. To run a successful franchise network, the right kind of support and training is a necessity. Initial training to impart the basic skills to create profitable franchise outlets is critical.
What are the three benefits of franchising?
Advantages of franchising your businessGrow your business - franchising your business can be a cost-effective way to grow your business. ... Costs - each franchisee finances their own franchise outlet. ... Easier management - the franchisees also run their businesses therefore reducing the management demands placed on you.More items...
How does social franchising work?
Social franchising is very similar to commercial franchising in the way that it works - it allows a social enterprise to expand their reach, scaling their services and operations to new areas and locations while working with a local partner who becomes the social franchisee. Here at The Franchise Company, we've seen many social enterprises have great success with social franchising. The goal of a social franchise is to increase the scale of operations and impact whilst seeking or maintaining sustainability to keep functioning and enable the organisation to reinvest into the community it serves.
Why is social franchising important?
Social franchising is also interesting when looking at the broader category of replication and expansion strategies. Compared to wholly-owned expansion models and more flexible open source strategies, social franchising sits somewhere in the middle. The social franchise model is best used to allow both the franchisor and franchisee flexibility and independence while ensuring that the goals, branding and resource management required by the parent company are still met and fulfilled by the franchisee.
How Different Is Social Franchising To Commercial Franchising?
Put simply, the key difference is that a commercial enterprise will franchise in order to make profit, whereas a social enterprise will franchise in order to increase the social impact .
What Are The Benefits Of Social Franchising?
Franchising can be a fantastic way for social enterprises to replicate successful systems and expand their brand. When properly implemented, franchising can support organisations in the social sector by scaling operations in a socially conscious and low risk model, aligning the goals, values and branding of the franchisor and franchisee.
What is the relationship between a franchisee and a commercial franchisee?
A commercial franchisee is encouraged and supported to make as much profit as possible, meeting financial goals and being successful. The social franchise model, however, is quite different. As with commercial franchises, social franchisees have a need to meet certain financial requirements, but there's also the responsibility of meeting the social objectives of its parent company too.
What is the key part of a social franchise agreement?
But, much like in commercial franchising, a key part of the agreement is the alignment of goals and values between the franchisor and franchisee. In most social franchise models, the social objectives are a much higher priority than the financial objectives. A lot of social franchises are not for profit organisations in which the majority of profits made are reinvested into the work being done.
What is the appropriate level of flexibility for a social franchisor?
It's worth bearing in mind that the appropriate level of flexibility for a social franchisor is dependent on a number of different factors. The complexity of the core social franchise model, for instance, alongside the brand identity and risk level will all play a part in determining the best franchise agreement in each case. Determining where the majority of funding comes from and the extent to which learning processes to be shared and learned, and many more factors all play a role in identifying the best approach.
How Does A Business Become A Social Franchise?
At The Franchise Company, we are passionate about the potential that social franchising has, and have helped a variety of social enterprises enter the franchise model.
Why Use A Social Franchise Model?
A social franchise model is so appealing to many social enterprises as it can achieve financial sustainability, longevity and effective expansion for the organisation and its mission, without compromising on the socially beneficial principles of the brand . Social franchising can enable strong and financially stable growth, whilst also sharing knowledge, learning and information to help increase the social impact of the organisation. This stands in contrast to traditional company-owned growth, where the financial responsibilities generally remain with the central organization, or open-source and dissemination methods where the social impact is significant, but without any form of ongoing revenue generated.
Why Choose The Franchise Company?
Since forming The Franchise Company in 1991, Julie has gone on to help establish a wide variety of both social and commercial franchises across a range of sectors.
How to start a franchise?
To successfully begin a new franchise, an organisation must have: 1 A proven track record in their sector, having made recognised social impact under their company and brand name. 2 Demand or need for the products or services provided must be identifiable in other geographical areas, be it from end-users, policymakers, funders and, ideally, potential franchisees. 3 The organisation must be able to set up a system that offers real financial and social value for both the franchisor and the franchisee. 4 An easily replicable and understood impact model. Creating a model that can be quickly learned by new franchisees with easily transferable knowledge and methods, and has the capability to be replicated in a variety of different locales. 5 Set systems, operations and procedures in place that ensure the day-to-day operations of the business are consistent and can be clearly understood by new franchisees. 6 Commitment to movement into a social franchise model from the staff, team and board of the organisation. 7 A financial situation that is sustainable and stable, with the ability to comfortably take on the costs of setting up a franchise. 8 A strong organisational brand and identity that allows customers and franchisees to recognise and become loyal to the brand.
How are franchisees incentivised to be successful?
In a commercial franchise, franchisees are incentivised to be successful by making more profit and meeting goals so that they are able to achieve financial success . In the social franchise system, this is generally not the case and so social franchises need to be able to meet both the social objectives and financial requirements of the project or organization.
How long should a social franchise be running?
The organisation should have been running for at least twelve months, but ideally for around three years, with development capital to be able to take on the costs of setting up a new franchise. Many existing social franchises have successfully attracted funding or donor support to finance the development costs.
How to encourage entrepreneurship among franchisees and their communities?
Encourage entrepreneurship among franchisees and their communities by devolving power and giving responsibility to franchisees.
What is social franchising?
Social franchising is one of several promising High Impact Practices in Family Planning (HIPs) identified by a technical advisory group of international experts. A promising practice has limited evidence, with more information needed to fully document implementation experience and impact.
Where are social franchises being implemented?
Large social franchise networks are being implemented in middle-income countries such as India and South Africa as well as in fragile, less-developed markets such as the Democratic Republic of the Congo and Mali. 14 The network size varies, with some programs reaching significant scale.
What challenges can social franchising help countries address?
In many countries, the quality of health care in the private sector varies substantially among providers, and governments struggle to effectively provide stewardship and oversight of mixed health systems. 5 A systematic review found that franchised clinics typically score higher on quality ratings than non-franchised private clinics, 4 although an additional review reported mixed results. 6 With support from the franchisor, franchisee clinics have demonstrated that they can improve clinical quality standards, including high-quality counseling, provider competence, infection prevention, and clinical governance. 7 Beyeler et al. concluded that “franchising may be a particularly useful strategy in areas where a large unregulated private sector provides the majority of health services.” 4
How do franchisors meet the needs of young women?
Meet the needs and preferences of female and male clients under age 25 by including youth-friendly contraceptive services . Young clients may already prefer accessing family planning from the private sector, where many may perceive greater anonymity and privacy. However, franchisors can proactively support franchisee providers to better reach and serve young clients through organized media campaigns, use of social media, flexible clinic hours, and provider training on how to deliver confidential, nonjudgmental services. (See related HIP brief on Adolescent-Friendly Contraceptive Services .)
Why is de-franchising important?
De-franchising—that is, removing a facility from the franchise network—is sometimes necessary when franchisees are unable or unwilling to improve their quality to meet clinical standards or other franchise requirements. However, high rates of de-franchising point to poor initial franchisee selection and/or failure of the franchisor to deliver inputs that are valuable to the franchisee.
What is a written agreement between a franchisor and franchisee?
A written agreement between franchisor and franchisee sets out defined quality standards, expected services available, and roles and responsibilities between parties. Agreements may also include the price guidance at which these services should be offered.
Can social franchising be combined with vouchers?
There may be greater impact when combining social franchising with a voucher program. A study in Pakistan documented a net increase of 23 percentage points in modern contraceptive use in districts served by social franchise facilities participating in a voucher program. 2
Why Social Franchising Is Happening
The work of non-profit organizations often tends to address current challenges on a local level. However, they rarely reach their full potential to help environments elsewhere. What happens then is that other people in other places duplicate the search for solutions for similar problems.
Entities with a Social Purpose
In the strictest sense of the word, social franchising originated with charities that needed to efficiently extend health services. Initially, these services were family planning and reproductive health services. Additionally, they covered maternal and child health services and tuberculosis diagnosis and treatment.
What is social franchising?
People commonly associate franchising with fast foods chains, but it is also changing the face of healthcare in the developing world. In countries where the public health system is not strong, people already visit private health clinics and pharmacists for their health needs.
Why is social franchising important?
Social franchising helps us to quickly scale-up access to services so that we can reach poor and under-served women in a sustainable way. It works best in countries where private healthcare facilities are already serving poor people.
What is Bluestar social franchise?
Our private healthcare providers deliver services for us under our BlueStar social franchise brand. It works in much the same way as a commercial franchising operation with franchisees – clinics, midwives, and pharmacies – paying a small fee to join the network.
Is social franchising effective?
While our social franchising networks vary from country to country, we find that this approach is particularly effective in helping extend our reach within urban areas.
What Are Social Franchises?
Social franchises are established by people who recognize a problem in society and strive to solve it by using the entrepreneurial principles that make up traditional franchising to create, organize, and manage a venture .
When was social franchising first used?
In fact, one of the first known instances of social franchising came to be in 1995 within the medical services field. Nowadays, Greenstar, a Pakistani social franchise, provides family planning and reproductive health care to people with lower income by way of its 80,000 retail outlets and over 24,000 providers.
How to capitalize on franchising principles?
In order to capitalize on franchising principles, a non-profit, charity, or social venture must build a solid foundation. The following advice for potential social franchisors is from the report “ Nonprofit Owned Franchises: A Strategic Approach ,” conducted by Community Wealth Ventures, a Washington D.C.-based consulting firm, and the IFA Education Foundation:
What is franchise agreement?
An agreement that regulates rights and obligations to secure the sustainability of the franchise as a system
What is ESFN in franchising?
Noted above, the ESFN, is one of the largest, formal organizations spreading the word about social franchising. Founded by members of the European Union, membership is limited to exclusively social franchises and free of dues.
What is the motivation behind social franchise?
In contrast, the motivation behind a social franchise is the expansion of a goal, such as increasing the employment rate of a group of disadvantaged people. Profit, while still a needed component for success, is viewed as a means to achieve, not the achievement itself.
Where is the International Centre for Social Franchising?
The organization is based in London and has two field offices in the USA (San Francisco) and Australia (Victoria).
What is social franchise?
Social franchises are established by people who recognize a problem in society and strive to solve it by using the entrepreneurial principles that make up traditional franchising to create, organize, and manage a venture.
Do you need to have a minimum net worth to be a franchisee?
In the case of Everytable, prospective franchisees don’t need to have an up front investment. In addition, unlike most franchise opportunities, would-be franchisees aren’t required to have a minimum net worth to qualify, nor do they need to have good credit.
Will The Everytable Social Franchise Idea Work?
In my view, it’s great to see a California community come up with a new way to distribute needed, healthy food to underserved areas.
