Franchising originated in the United States and has become one of the most popular expansion methods and distribution strategies in the world today. Franchising has the benefits of:
- expansion with reduced capital for franchisors
- replication of a proven system - franchisees gain access to business systems and formats that have been tried and tested.
Social franchising is a relatively new concept in the industry, also referred to as not-for-profit franchising, and this entails the franchising of goods and services for social rather than commercial goals.
The United States Agency for International Development funded the ‘first generation’ social franchises in Mexico in the early 1990’s. These franchise programs were mainly health focused
Social franchising is gaining momentum around the world, as non-governmental organizations (NGOs) and social aid programs are considering franchising as a mechanism to deliver services and products that have social goals and impact.
Social franchising started in the health sector to bridge service delivery gaps in clinical family planning services. Since then, the concept has expanded beyond healthcare and also beyond emerging markets.
Social franchises are found in both developed and developing countries.
In developed economies:
- The focus is on job creation for disadvantaged people.
- There were 56 social franchises and aspiring social franchises in 12 countries in Europe in 2011.
- Over 80% of these were less than a year old.
In emerging economies:
Social franchises provide services to the poor and also create jobs
- There were 90 programs running globally in 2013 in the health sector
Any concept or service offering that has the potential to be replicated at scale and standardized could potentially be develop as a social franchise, if the pre-conditions for social franchising are met
The health sector has the most prevalent examples of social franchises, specifically in the reproductive health sector.
Examples of social franchises in the non-health sector include:
- Sidai, a veterinary care program in Kenya,
- Foodbanks UK, a program providing food for people in food poverty
We take a look at some successful social franchises in more detail:
- Dialogue in the Dark was established in Germany by Andreas Heinecke in 1988.
- It consists of exhibitions in darkened rooms where partially sighted people act as guides for sighted people – this gives you an idea of the former’s own experience.
- It has two main objectives:
- to make sighted people sensitive to the needs of visually impaired people,
- and to create employment and training opportunities for people living with sight challenges.
- The revenue model is based on admission fees.
- Since its launch,
- more than 140 exhibitions have been staged,
- in over 20 countries,
- attracting more than five million visitors and creating jobs for more than 4000 visually impaired people
- Vision Spring could also be described as a microfranchise.
- It creates work for people to become individual distributors of affordable eyeglasses.
- Jordan Kassalow and Scott Berrie established Vision Spring in New York in 2001.
- Franchisees earn revenue from the sale of glasses.
- Prices to the end consumer depend on markets and costs.
- The model is self-sustainable at every level.
- The production company, Scojo Vision, is a for-profit organization and donates 5% of its pre-tax profits every year to the franchise.
- Franchise fees are paid on the number of glasses sold to cover production and transport costs
- The franchise operates in 12 countries on different continents.
- Aflatoun teaches children aged 6 to 14 financial management skills, with the objective of breaking the cycle of poverty in underdeveloped countries.
- Children are taught about their rights and responsibilities and also how to save and spend money responsibly.
- The organization works with partners in 11 countries.
- Operational in 113 countries
- Reach an estimated 4 million children a year.
- Aflatoun’s success is partly based on a social-franchising dissemination strategy.
- The goal is an easy-to-replicate program allowing for local modifications.
- Janani is a non-profit organization based in Washington, DC and was established in 1995.
- This franchise is focused on reproductive health in the Indian states of Bihar and Madhya Pradesh.
- The organization franchises rural medical practitioners and private doctors to provide branded contraceptives and clinical family planning services through its Surya clinics.
- The success of the Janani group is attributed to monitoring and oversight levels that are built into the program at all levels.
- Every person in the system has a financial stake in the activities of the group - from sales and training personnel to the franchisees.
- The continuity of the program, acceptance by the market and the potential to achieve sustainability shows that social franchising can succeed using commercial principles
- In 2011, Surya clinics were operating at 105 outlets in four provinces
- Aliouche, E., & Fernandez, D. (2015). Social Franchising: A panacea for emerging countries? The case of Algeria. In International Conference on Economics and Management of Networks – EMNet. Cape Town.
- International Centre for Social Franchising. (n.d.). Retrieved from www.the-icsf.org
- Montagu, D. (2002). Franchising of health services in low-income countries. Health Policy and Planning, 17, 121–130. http://doi.org/10.1093/heapol/17.2.121
- Viswanathan, R., Schatzkin, E., and Sprockett, A. (2014). Clinical Social Franchising Compendium: An annual survey of programs: findings from 2013. San Francisco.
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