One of the reasons that many of us become development professionals is to help improve people’s lives and the state of our world. We spend our careers developing activities that reduce poverty and conflict, improve health and well-being, improve educational and professional opportunities, and promote a more just and equitable world. Once we hone those successful programmatic formulas, we try to increase access to those activities to as many people as possible.
There are many ways to scale effective programming. One is through social franchising. This approach builds on commercial franchising, in which a franchisee leases a business concept from a franchisor. The franchisor lends its name, its implementation strategy, and, in some cases, business leads. The main difference between commercial and social franchising is that the former has a financial goal, while the latter has a social goal. The other big difference is funding. Commercial franchises assume revenue from the sale of products and services. Social franchises can do the same. In fact, it is ideal for them to build revenue streams from products and services. But not all do and sometimes require other ongoing sources of funding.
Why might an organization want to create a social franchise? This can be an efficient and effective way to scale effective practices. It can grow the network of practitioners in a focused and coherent way that promotes minimum standards and expectations. And why would a person or organization want to invest in a social franchise? Doing so is a way to invest in an existing, time-tested program or approach without having to start from scratch. It allows the franchisee to join a movement, with coaching support and peers, in ways that increase the likelihood of success. It enables a person or team with passion and interest but, perhaps, less specific programmatic experience, to accelerate the learning curve and achieve impact faster than would otherwise be possible on their own.
We recommend three major considerations when thinking about starting a social franchise:
- Start with a time-tested, impactful program model. The success of a social franchise is only as good as its core programs. We therefore only recommend starting down the path of a social franchise if you have a program model and implementation strategy that has already proven to be successful—ideally, in multiple contexts. You must have confidence that the base program will work in the new contexts. In commercial franchising, the goal is almost always to replicate the exact same business model in new contexts. Social franchising must start with a solid foundation but also be open to somewhat more flexibility, as program elements may have to be adjusted, at least somewhat, for the new circumstances.
- Training and future support must be clear and accessible. Training materials must be written and delivered in ways that they can be understood by all members of the franchisee’s team. This not only includes the executive team but also the implementers and data collectors who work at the local level. The franchisor should decide early on how the rollout of the training will take place. Will it include all the initial members of the implementation team? Will it just include a core group, who will then be responsible for training the rest of the team? The franchisor must also decide upfront about longer-term support to each franchisee. Will this include onsite follow up? Periodic virtual recertification or refresher trainings? Participation in a community of practice with other franchisees? How much ongoing support will be necessary to achieve expected success and maintain the integrity of the brand?
- The franchisor must organize the social franchise around a clear and viable business plan. In a commercial franchise, a franchisee earns revenue from the sale of products or services; and the franchisor makes money from an initial franchise free and royalties from ongoing sales. This business model may not always be possible in social franchise scenarios, where the goal is social impact. It is therefore essential for the franchisor to determine the initial and long-term funding model of a social franchise. Is there some way to monetize services? If not, can the franchisor and franchisee seek initial grant funds for start up or longer-term program implementation? What will be the longer-term role of the franchisor in financially sustaining the work of the franchisee? These expectations must be clear and transparent from the onset.
There are many more details that go into each of these considerations, among other issues that are required to plan and start a social franchise. Please do reach out to us at Doab Development if you would like to discuss these issues further.
Bonus: For social entrepreneurs who are operating more than one project site and would like to participate in an intensive community of practice, the International Franchise Association’s Social Sector Committee is leading a six-month Social Franchise Accelerator Program starting this fall. Applications are due August 12! Please let me know if you have questions.
