Social Franchising

Social Franchising – Scaling social impact

AfrikaCamp, 31.1.2009

Valerie Hackl

2090131-AfrikaCamp-Social Franchising-Final

„McDonaldisation“ of social sector –Can this work?


An example: CFWshops, www.cfwshops.org

• Lack of access to essential drugs and basic healthcare: ~30.000 children dying each day in the developing world

• ~70% of childhood illness and death: short list of preventable and treatable diseases

• Launched in 2000 by The HealthStore Foundation in Kenya, expansion to Rwanda since 2008

• Branded franchise network of health outlets

• ~70 clinics and drug shops owned and operated by Kenyan nurses and health workers in rural areas

Situation

CFWshops

Improve access to essential drugs, basic healthcare and prevention services for marginalized children and their families in the

developing world

Source: www.cfwshops.org


An actual CFWshop


Why replicate?

Point of departure: Proven, scalable social program

• Because the wheel doesn’t need to be reinvented over and over again

• Because more people in need should be grantedaccess to social products and services

• Because scale economies must be exploited to makeexisting programs more efficient


Various concepts for replication

Dissemination Cooperation(E.g. Social Franchising)

Subsidiary/ branches

Resource requirement

Control

Speed of growth

Source: Schöning, M. (2007), Multiplikation durch Franchising. In: Achleitner, A.-K. et al. (Hg.), Finanzierung von Sozialunternehmern, Stuttgart: Schäffer-Poeschel Verlag, 192-202.


Various concepts for replication

Dissemination Cooperation(E.g. Social

Franchising)

Subsidiary/ branches

Resource requirement

Control

Speed of growth

Source: Schöning, M. (2007), Multiplikation durch Franchising. In: Achleitner, A.-K. et al. (Hg.), Finanzierung von Sozialunternehmern, Stuttgart: Schäffer-Poeschel Verlag, 192-202.


Social Franchising

• Fewer resources required compared to branches

• Quick expansion possible

• High degree of control

• Self-learning system

• Local embeddedness leading to access to localresources

• Danger of „mission drift“

• Risk of opportunisticbehavior

• Difficult selection of franchisees

Advantages Disadvantages


Traditional franchising as starting point…

Business concept

Franchisor Franchisee Customer

Brand

Control mechanisms

Concept development

Franchise fee

Information

Product

Service

Price

Marketing & Image


Social concept

… for Social Franchising

Franchisor(e.g. socialentrepre-

neur)

Franchisee(e.g. NPO)

Customerand/or

beneficiary

Brand

Control mechanisms

Concept development

Franchise fee

Information

Product

Service

Price

Marketing & Image

Social sector


CFWshops

How the CFWshop franchise is set up

Health-Store

Founda-tion

Nurses, health

workers

Families in rural areas

CFWshops brand

Control mechanisms

Concept development

Franchise fee

Information

Diagnosis

Prevention

Price

Marketing & Image

Health sector

Treatment


The CFWshop system in a bit more detail

• Design & equipment of CFWshops are very basic and standardized

• Central sourcing of quality drugs

• Three-week training program into the CFWshops franchise system for all future franchisees, ongoing training lateron

• Investment per franchise outlet:

-~USD 1.200 (USD 600 for inventory, USD 600 for development costs and initial training)

-Franchisee carries cost for his/her shop: USD 200 upfront, the rest can be financed by loan


Important principles

• Scalability: Application of one social concept to many locations

• Standardization: Internal principles and guidelines to ensure proper diagnoses and treatments

• Economies of scale: Increasing cost efficiency as network grows (in areas such as advertising, distribution, information systems, risk management, training, and supplies)

• VisionSpring: Distribution of reading glasses for developingcountries

• Dialogue in the Dark: Exhibitionto discover the world of the blind

• Science-Lab: Science courses for children

• Grameen Village Phones

• …

Three principles inherent to CFWshops… …and other social franchises


“Nearly every problem has been solved by someone, somewhere. […] The challenge of the 21st century is to find out what works and scale it up.”

Bill Clinton


Thank you for your attention.

Contact: [email protected]