What is Social Sector Franchising?


Social sector franchising is the application of commercial franchising principles to promote social benefit rather than private profit. 

Variations of Social Sector Franchising

Image of TecapMicrofranchising - social sector franchising by small businesses in the developing world. The primary feature of a microfranchise is its ability to be streamlined and replicated. An example of microfranchising is Tecnologia Apropiada (TecAp) in Nicaragua, which operates microfranchises owned by rural women from fair trade coffee cooperatives. These women possess the basic skills and motivation to promote solar and other appropriate technologies and sell small solar-powered items door-to-door. Microfranchisees are recruited in groups of five to ten women per group. These women are vetted by the management of their coffee cooperative to ensure that they are active community members (which provides natural sales outlets), have experience managing income from a business, and are in good standing financially (since microfranchisees handle hundreds of dollars’ worth of product on a regular basis).

Image of MicroconsignmentMicroconsignment - is a sustainable, replicable means of delivering health-related and economically beneficial goods and services to remote villages utilizing a rotating capital mechanism with low start-up costs that are continually reinvested. Solisyon Kominote Yo is a local Haitian social enterprise that emerged from Ouanaminthe Social Impact and Innovation Consortium (OSIIC) which promotes microconsignment. Microconsignment creates first-time access to life-changing technologies, products, and services for isolated villagers by empowering first-time entrepreneurs as “community advisors.” The community advisors are trained to sell essential technologies in their communities, such as solar technologies, water filters, eyeglasses, and stoves. Entrepreneurs promote technologies via campaigns, door-to-door sales, and word-of-mouth. Technologies generate savings and improve the living standards of buyers. The community advisors receive products in consignment and earn a margin on each sale, thus running a profitable business from day one.

 Some of the best known applications of the use of franchising to deliver social benefit include:

Healthstores ImageHealthStore Foundation improves access to essential drugs, basic healthcare, and prevention services for children and families in Kenya through CFW Clinics. HealthStore concentrates on the short list of preventable and treatable diseases (and perinatal conditions) which accounts for approximately 80 percent of childhood death. Clinics are operated by Registered Nurses who are also franchise owners, who comply with quality standards and are supported by an electronic clinic management platform providing drug inventory management, evidence-based research, and development and continuing medical education. 

The HealthStore Foundation's CFW model is a network of micro pharmacies and clinics whose mission is to provide access to essential medicines to marginalized populations in the developing world. The CFW outlets target the most common killer diseases including malaria, respiratory infections, and dysentery among others. They also provide health education and prevention services. The network operates two types of outlets: basic drug shops owned and operated by community health workers, and clinics owned and operated by nurses who provide a deeper list of essential medicines as well as basic primary care. As the franchisor, HealthStore can revoke a franchisee’s right to operate an outlet if the franchisee fails to comply with the franchise rules and standards.

The CFW model incorporates all the key elements of successful franchising: uniform systems and training; careful selection of locations; and most importantly, strict controls on quality backed up by regular inspections. And importantly, HealthStore uses the combined buying power of the full network to obtain quality medicines at the lowest possible cost.

Image of Jibu StoreJibu equips African entrepreneurs to sell affordable drinking water via profitable social franchises. As a for-profit company, Jibu is quickly scaling a network of locally owned franchise business owners, starting in urban areas of Uganda, Rwanda, and Kenya. Many of these franchisees are young women. Their anchor product is affordable, convenient, high-quality drinking water. Their market is the vast millions of families living in communities unable to afford many of life’s most needed necessities.

Budding entrepreneurs have big dreams. In emerging markets like developed ones, entrepreneurs envision businesses that grow organically, generate profit, benefit their communities, and leave a legacy for the next generation. They want to control their own destinies and avoid undue dependency on others. They are incredibly passionate and will take big risks to realize their dreams.

Jibu identifies, qualifies, incubates, and capitalizes budding entrepreneurs from this rich resource pool to launch franchise businesses. Jibu franchisees make money while solving their communities’ issues, generating hundreds of new local jobs and igniting a virtuous cycle of wealth generation for themselves and their communities. They have the passion, drive, and ability to get the job done. The payoff over time: hundreds of powerful new businesses and thousands of high-quality jobs -– built on the foundation of providing an affordable, lasting water source for many of the world’s underserved families.

Image of Hapinoy StoreThe Hapinoy Sari-sari Stores are small neighborhood retail shops started and run by women microentrepreneurs from their homes. Quite often these microentrepreneur mothers – or Nanays – engage in this microbusiness to augment their family’s income. The humble sari-sari store stands for many things: an extended pantry supplying the community’s daily needs, a representation of an average Filipino’s means of living, a colorful cultural icon, a massive distribution channel, and a lot more.

Since inception, the program has trained and partnered with 3,000 amazing Nanay microentrepreneurs, women microentrepreneurs who own and run sari-sari stores. With newfound confidence and strengthened zeal, our Hapinoy Nanays are now better equipped to face the challenges of running and expanding their stores. For Hapinoy, Sari-sari Stores serve as a huge opportunity—both as a business for Nanays, and as a way to bring products and services to communities, to impact the lives of so many Filipinos.

Hapinoy’s training programs include topics such as business skills, personal development, financial literacy, and family-based workshops. These training programs are supported by various stakeholders from different fields such as government and non-government organizations, multi-national corporations, microfinance institutions, and other entities that share in Hapinoy’s goal of empowering Filipino microentrepreneurs.

Dr. Fiona Wilson, Executive Director of the Center for Social Innovations and Enterprise was a guest presenter for an International Franchise Association webinar on Social Sector Franchising and Shared Value entitled “Business for People, Planet & Profits.” Learn more...