http:A Look at Social Franchise
Published by Scope Management Consultancy
On April 5, 2021
Abu Dhabi, United Arab Emirates
The Social franchise is built on franchise strategy to address social needs & demands. While normal franchises focus on profit maximization, social franchise objective is to resolve social problems & challenges and serve communities.
As Devin Hibbard Co-founder & CEO of (BreadForLife) and (Street Business School) said: "Social franchising essentially takes a page from the corporate world and deploys it for social good."
E. Hachemi Aliouche Director of Rosenberg International Franchise Center, University of New Hampshire and Wilson stated in their most recent article in the Stanford Social Innovations Review (February 2021),“ If the success of commercial franchising could be harnessed for positive social impact, the benefits would be immense. They would include improved access to products and services for tens of millions of people. They would provide ownership opportunities at the base of the pyramid (BOP) for tens of thousands of franchisees. They would create hundreds of jobs for thousands of people employed by franchisees and franchisors, and spillover benefits, such as healthy pressure on local suppliers to improve the quality of their products and services to a level high enough to win contracts to supply franchise networks.”
The Social franchise is emerging as a promising powerful approach to multiply the impacts on societies around the world in providing efficient high-quality services. It is used in many countries. World Franchise Council (WFC) heralded the social franchise initiative's positive role in franchise development.
Certainly, Social Franchise (SF) is a social change & social services approach used by entities, social groups and charity association in rural areas & urban centers allow proliferation of SF units easily to provide needed products & services. It is, for instance, ubiquitous in general health, care for mums, kids, aged population (Elderly care centers), education, in resolving environment issues causing dire impact on population, and in transport & modern communication facilities for disadvantaged or remote communities.
Franchisors through franchise processes and structures assist franchisees & provide support in establishing their entities and setting up their business.
The Franchisor support reduced risk and guaranteed high quality that is a pivotal element of success. The main outcome is maintaining continuity, growth, and real valuable benefits to the society, while yielding profit.
Second Type of Social Franchise
The second type of social franchising model is done by organizations such as, NGOs, social networks, Relief & Social Welfare, Aid foundations, and handicapped associations. The power of social franchise is in the easy thump print of units in different locations within a network allowing joint initiatives, with knowledge sharing & franchisor outstanding support. Certainly, Social Franchises comply with the franchise model to spread social benefits & gains. The Profits multiplier is in the quick spreading of units and network expansion.
Social organization, government or non-governmental organizations and charity associations beside big franchisors offers social franchisee an operation system to provide effective services & product to a community.
The franchisee operates and perform according to the franchisor set standards. He will enjoy staff training, use of brand advertisements, supplies and equipment sources, support services, and access to professional advice. The franchisee must comply with the requirements including the manual to provide the designed services, and agreed-upon pricing policies .The franchisee pays franchise fee at the start and a percentage of monthly sales or annual profits. In social franchise, payment of upfront fee is reduced. The remarkable achievement of social franchise is the creation of jobs. The European Social Franchising Network has identified about 60 social franchisees in Europe, which employed over 13,000 people.
Significant Development in Social Franchising
The International Franchise Association (IFA) in USA formed the Social Sector Task Force as a platform to advance and leverage the use of franchise methods and technology to serve the needs of the social franchises .It was founded by Michael Seid, a member of the IFA Board of Directors. There are now many Social Franchisors throughout the emerging markets. The IFA pleas for joining the franchise Task Force.
Another active organization of Social Franchises is the International Centre for Social Franchising (ICSF) including UK, USA, Australia, and others. It accomplished many endeavors to develop Social Franchises. In 2015, it issued an especially useful social franchise tool kit with NESTA, Bertelsmann Foundation, London School of Economics, and others to help finding new Social Franchise opportunities. It also produced a research about replication of health care projects which is a significant achievement.
Social Franchises Outlets Types `
Comprise communication facilities, villages & rural areas electricity provision, solar energy solutions, and many other needed services. The ICSF encouraged the Food Banks network, which is run by the Trussell Trust charity, as one of the UK's most successful social franchises with more than 250 franchisees.
According to the ICSF report the Food Banks, were established in 2004, provide emergency food and support to people 'experiencing crisis'. Food Bank franchisees co-operate and share learning. The Central Charity remains in control. Food Bank asks for a donation of £1,500 from franchisees as a "set-up front fee" and an ongoing annual donation of £360.
However, there are other Social Franchise models such as that used by Caring Christmas Trees, which charges a 5,000-franchise fee in order to provide additional income for the charity Bethany Trust, which coordinates the initiative of real social change in remote areas.
London-based Children's Health Education Charity Coram Life Education (CLE) is one charity that has successfully replicated its work across the UK using the franchise model. It has 24 franchisees, which are predominately other charities, that teach 800,000 children per year.
Social Franchise creates added value activities to local economies. It can tackle successfully climate change issues, refugee needs, poverty aid, displaced communities & employment issues and more.
Small & Medium Franchisee
SMEs perform well in replicating units & outlets to provide the needed social impact on issues of poverty and women economic empowerment & afford solutions to social problems overlooked by private and public sectors .It provides focus on social issues and innovative solutions to respond to social demand.
Scope advises that Emirates Association for Franchise Development (FAD) can work with concerned entities to develop Social Franchises in UAE and plays a significant role in this initiative. Scope Consultancy team is ready to work on that to set the suitable strategy and plans.
It is high time to promote & develop Social Franchise in the GCC & Arab world, since the culture & traditions encourage good generous community serving. Many Government services could be tackled by Social franchise outlets owned by locals, availing jobs for locals in municipality services, health services, charity organs, community services, women empowerment, childcare and environment while serving both the communities and the nationalization programs. Franchise systems have an essential corporate governance element in it, allowing private sector high efficiency control and better-quality services.
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