FARM SHOP: LESSONS LEARNED FROM SCALING A

SOCIAL FRANCHISE

McKague, Kevin;Harji, Karim;Jiwa, Farouk;

;

© 2018, CAPE BRETON UNIVERSITY

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IDRC Grant/ Subvention du CRDI: 108126-001-Farm Shop: Scaling Access to Agricultural Inputs

in Kenya (CIFSRF Phase 2)

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FarmShop:LessonsLearnedfromScalingaSocialFranchise

ForStanfordSocialInnovationReview

KevinMcKague

AssociateProfessor

ShannonSchoolofBusiness

CapeBretonUniversity

KarimHarji

ProgrammeDirector

OxfordImpactMeasurementProgramme

SaidBusinessSchool

UniversityofOxford

FaroukJiwa

Co-FounderandChiefInnovationOfficer

FarmShop

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FarmShop:LessonsLearnedfromScalingaSocialFranchise

Inrecentyears,theconceptofsocialfranchisinghasattractedincreasinginterestforits

potentialtoachievesocialimpactsinunderservedmarketsinwaysthatarefinanciallyself-

sustainingandscalable.1Manyorganizationsinvarioussectors–suchasSanergyin

sanitation,VisionSpringineyeglassesandtheHealthStoreFoundationinprimaryhealthcare

clinics–havebeguntotestthispotentialthroughestablishingandgrowingsocialfranchises

toaddressunderservedneedsinhealth,education,sanitation,vision,energy,agricultureand

otherareas.2

Socialfranchising(ormicrofranchising)istheapplicationofprinciplesofbusinessfranchising

(astandardizedandreplicablebusinesssystemforabusinessunit(shop,clinic,etc.)that

reducesriskfortheowner-managers)toachieveasocialobjective.Inadditiontoprovidinga

socialgoodtoendusers,socialfranchisesalsosupportlocalbusinessowner-entrepreneurs

throughsupportsystems(training,accesstofinancing,anefficientsupplychain,etc.)built

intothebusinessmodel.Theparentfranchisororganizationidentifiesanopportunityto

addressasocialproblemthroughdevelopingafranchisingbusinessmodelandenrolls

independentfranchisee-entrepreneurstoenterintoanagreementtorunindividualbusiness

unitsaccordingtotheconceptdevelopedbythefranchisor.

Whenafranchiseejoinsasocialfranchisingnetworktheybenefitfromtheworkthathasgone

intodevelopingandrefiningtheparticularmodelaswellasbenefittingfrombeingassociated

witharecognizedbrand,beingabletosourcefromanefficientsupplychainbenefitingfrom

economiesofscale,andpotentiallyaccessingtraining,financeandothersupportand

professionalservices.Fortheirpart,franchiseesareoftenrequiredtoadheretoqualityand

1Fairbourne,J.S.,Gibson,S.W.,&Dyer,W.G.(Eds.).(2007).Microfranchising:Creatingwealthatthebottomofthepyramid.EdwardElgarPublishing;Kistruck,G.M.,Webb,J.W.,Sutter,C.J.,&Ireland,R.D.(2011).MicrofranchisinginBase-of-the-Pyramidmarkets:Institutionalchallengesandadaptationstothefranchisemodel.EntrepreneurshipTheoryandPractice,35(3),503-531.2Christensen,L.J.,Parsons,H.,&Fairbourne,J.(2010).Buildingentrepreneurshipinsubsistencemarkets:Microfranchisingasanemploymentincubator.JournalofBusinessResearch,63(6),595-601;McKague,K.,Menke,M.,&Arasaratnam,A.(2014).AccessAfya:Micro-clinichealthfranchisedesignedforscale.InSocialFranchising(pp.61-79).PalgravePivot,London.

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customerservicestandards,sharebusinessinformationandgeneratearevenuestreamfor

theparentfranchisorthroughmarginsonproductssold,fixedpayments,orsome

combinationofthetwo.

Basedonourcollectiveexperienceinstudying,advisingandcreatingsocialfranchisesin

Kenya,Bangladesh,Zambia,Uganda,MaliandIndia,3wehavefoundthat,generallyspeaking,

localfranchisee-entrepreneurscanusuallybesupportedtoachievebusinessunitprofitability

(i.e.atthelevelofshoporclinic).Inourexperience,thebiggestchallengebyfarthatallsocial

franchiseesfaceacrossvarioussectorsandcountries,isfindingabusinessmodelthatcan

covertheoverheadcostsoftheparentfranchisorsothatthenetworkasawholecanbreak-

evenandscale.Manyorganizationsthathaveestablishedfranchisingmodelstoaddresssocial

needsareinthemiddleofthisprocessofexperimentingwith,developingandvalidatingtheir

businessmodelwiththiscorechallengefrontofmind.Oneoftheorganizationsexperimenting

withthiscentralsocialfranchisingchallengeisFarmShop,aKenyanagriculturalinputs

franchise.

FarmShopwasfoundedin2012byAshokaFellowsFaroukJiwaandMadisonAyer,tobe

smallholderfarmers’partnerinprosperitybyprovidinginputsthatincreasefarmers’

productivity,incomesandfoodsecurity.Byearly2018,FarmShophadgrowntoanetworkof

74shopsserving30,000smallholderfarmers,50percentofwhomarewomen.FarmShop’s

visionwasthatifitcouldbreak-evenandreachfinancialsustainability,itcouldscaletoa

networkofhundredsandthenthousandsofshopsinKenya,EastAfricaandbeyond.

Withthecorechallengeofsustainabilityandscaleinmind,in2015,FarmShoppartnered

withateamofspecialistresearchersandcollaboratorsandreceivedanimplementation

researchgrantbytheInternationalDevelopmentResearchCentreandGlobalAffairsCanada

undertheCanadianInternationalFoodSecurityResearchFund(CIFSRF)PhaseII,which

aimedto“toscaleupresearchresultsandinnovationstoreachmorepeopleandhavea

3SeeMcKague,K.,Wong,J.,&Siddiquee,N.(2017).Socialfranchisingasruralentrepreneurialecosystemdevelopment:TheCaseofKrishiUtshoinBangladesh.TheInternationalJournalofEntrepreneurshipandInnovation,18(1),47-56;McKague,K.,Menke,M.,&Arasaratnam,A.(2014).AccessAfya:micro-clinichealthfranchisedesignedforscale.InSocialFranchising(pp.61-79).PalgraveUK;Jiwa,F.(2007).HoneyCareAfrica.Microfranchising:Creatingwealthatthebottomofthepyramid,149-163.

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greaterimpactgloballytoimprovefoodsecurity.”4AnearlierPhaseIroundofgrantshad

focusedonincubatinginnovationstoimprovefoodsecuritysuchasnewvaccines,seeds,

fortifiedfoods,etc.PhaseIIshiftedtheemphasistounderstandinghowinnovationscanbe

scaledthroughprivatesectororganizationslikeFarmShop.TheresearchprojectwithFarm

ShopwasuniqueinCIFSRF’sPhaseIIportfoliointhatFarmShopwasasocialfranchiserather

thanatraditionaldevelopmentproject,researchcenterornon-governmentalorganization.

TheoriginalideaforFarmShopemergedfromFaroukandMadison’spreviousworktogether

atHoneyCareAfrica,asocialenterpriseoperatinginKenya,TanzaniaandSouthSudanwhich

isnowEastAfrica’slargestproducerofhoney.WhenHoneyCareAfricaneededabusiness

partnertodistributebeehivesandbee-keepingequipmenttoruralfarmersinKenya,they

couldn’tfindanyorganizationwithamodern,efficient,coordinateddistributionnetworkto

supplytosmallholderfarmers.Seeingthischallengeandopportunity,theideaforFarmShop

wasborn.

ASocialFranchisingModelforSmallholderFarmers

FarmShop’sbusinessmodelwasbeingdevelopedtohelpaddresstheworld’sfoodsecurity

challengewhere,globally,795millionpeoplearefoodinsecure.5TheWorldBank’sresearch

hasidentifiedthatifsupportedcorrectly,growthintheagriculturalsectorcanbeatleast

twiceaseffectiveatreducingfoodinsecurity,alleviatingpovertyandimprovingthelivesof

smallholderfarmersthangrowthinothersectors.6However,tobesuccessful,agriculture-led

growthrequiresarevolutioninproductivityandprofitabilityinsmallholderfarming.7While

greenrevolutionshavemorethandoubledagriculturalproductivityinmostoftheworld,

Africahasshownverylittlerelativeimprovement.8ThisstagnationinAfricanagricultural

productivityisduetomanyfactorsincludingthelackofaccesstoproductivity-enhancing

inputsandknowledgeinruralareasbecauseofhightransactioncosts,limitedinfrastructure

4CIFSRFCallforProposals,February2nd,2015.5FAO,20156Curtis,2010.Agriculturalgrowthisatleasttwiceaseffectiveinreducingpovertyasgrowthoriginatinginothersectors.SeeMondiale,B.(2008).WorldDevelopmentreport:agriculturefordevelopment.WashingtonDC:TheWorldBank,page6.7Mondiale,B.(2008).WorldDevelopmentreport:agriculturefordevelopment.WashingtonDC:TheWorldBank.8BMGFcite.

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andinstitutionsandlackofeconomiesofscale.9Perceivingthesechallenges,variousdonors

havedevelopedprojectstosupportagriculturalinputshops,howevertheseinitiativeshave

notbeenfinanciallysustainableorsuccessfulinachievingscale.10

InestablishingFarmShop,FaroukandMadisonwereconsciousofthestrengthsand

weaknessesintheinstitutionalenvironmentinKenya.Theirtargetmarket–smallholder

farmers–werepoor,geographicallydisbursedandrisk-aversewithlowlevelsofliteracyand

cognitivebandwidth.11Womenfarmersfacedadditionalconstraintssuchasmorelimited

accesstocreditandgreaterhouseholdworkloadsandresponsibilities.12Anadditional

challengewasthatcropsandlivestockvariedfromregiontoregionduetoagro-ecologicalsoil

andclimateconditionsaswellaslocalfactorslikeproximitytomarkets.Localentrepreneurs

thatcouldbecomefranchiseesoftenhadlimitedbusinessskillsanddisciplinearound

reinvestingprofitsfromsalesbackintoinventory.Thevaluechainfromformalsector

suppliersofagriculturalinputssuchasfeed,seed,fertilizers,medicines,etc.toindependent

shopswasfragmentedwithlimitedeconomiesofscaleanduncertainlevelsofproductquality

andreliability.

ItwastoremoveobstaclesandreducerisksforfarmerandfranchiseesuccessthatFarmShop

developeditssocialfranchisingbusinessmodel.Likeothersocialfranchises,thekeychallenge

toscalewouldbetodevelopabusinessmodelthatwouldgenerateenoughincometocover

theoverheadcostsoftheparentfranchiseorganization.FarmShopgeneratesrevenueonthe

marginsitearnsbetweenpurchasingagriculturalinputsfromsuppliersandsellingthemto

franchisees(seefigure1).FarmShopsellsabout700SKUsineightmajorproductcategories:

animalfeeds,veterinarymedicines,minerals,day-oldchicks,seeds,fertilizers,agrochemicals,

9Mondiale,B.(2008).WorldDevelopmentreport:agriculturefordevelopment.WashingtonDC:TheWorldBank,page12.10See,forexample,“TheADAPTProjectinZambia:SuccessesandLessonsinBuildingaScalableNetworkofRuralAgro-DealerstoServeSmallholders”(2010).Atlanta:CAREUSA.FarmShopboardmembersFaroukJiwaandChristianPennottiservedasadvisorstothisinitiativewhichreceivedfundingfromtheRockefellerFoundationandAGRA(AllianceforaGreenRevolutioninAfrica).11ACUMENandBainandCompany.(2014).GrowingProsperity:DevelopingRepeatableModels.Availableat:http://acumen.org/growing-prosperity/;HYSTRAHybridStrategiesConsulting(2015).Smallholderfarmersandbusiness:15pioneeringcollaborationsforimprovedproductivityandsustainability12McKague,K.,(2014).Gender.InMcKague,K.&Siddiquee,M.MakingMarketsMoreInclusive.NewYork:Palgrave.

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andequipment.Theyalsoreferfarmerstoavarietyofservicesincludingveterinaryservices,

artificialinsemination,andsoiltesting.

Figure1:FarmShop’sSocialFranchiseBusinessModel

Intheblueprintstagesofbusinessmodeldevelopmentbeforeitopeneditsfirstshop,Farm

Shopdrewonresearchandthefounders’experienceinseveralcountriestoestimatethat,

withsomesmallbutcriticalimprovementsintheexistingsupplychain,anaverageshopmight

sellUS$5,000permonthwitha10%marginretainedbyFarmShop.Withheadquarters

overheadsatroughlyUS$1Mannually,initialestimateswerethatthenetworkcouldbreak-

evenataround150shops.

Feed Seed and Other Refe,-m|5

Company FertifizerCompany Agro-inputs to Services

SUPPLIERS

Market & Demand Training & Technzflogy Franchise Information,

FARM SHOP Creation Certification Platform Operating Manua‘ Capaciw Bu_i|dimJ& Processes & Education

:

EUFRANCHISEES

SMALLHOLDER

FARMERS

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FarmShop’sapproachwasprimarilyaconversion-franchisingmodelwhereexisting

independentagro-dealershopswouldbeconvertedintoFarmShopbrandedshops.InKenya,

thenormisforexistingagrodealershopstobeoperatedbehindmetalbarswherecustomers

can’tbrowseproducts,seepricesorchoosebetweenvariousproductofferings.Asaresult,a

senseofdistrustbetweenfarmersandshopownersisgenerated.Farmerscan’ttellbylooking

iffeedshavefillers,ifseedswillgerminateintothevarietiespromisedorifanimalmedicines

arelegitimate.Becauseoftheseconstraintssmallholderfarmersface,includingtheir

vulnerabilitytotheclimateandinabilitytoreversepurchasingdecisions,buildingtrustwith

farmerswasessentialtoFarmShop’ssocialfranchisingmodel.Onewaythiswasachieved

wasadramaticallydifferentshopformatandrelationshipbetweenfarmer-customersand

franchiseebusinessowners.Premiseswereopentoallowproductinspectionandcomparison,

priceswereclearlylabeledonallproducts,andshopownersweretrainedtoprovide

informationtofarmersonselectingproductsthatwouldbestmeettheirparticularneeds.All

productsweresourcedthroughreputablesupplierstoguaranteequalityandauthenticityand

shopownersandtheirshopassistantsreceivedtrainingincustomerscare,agricultural

practicesandanimalhusbandrysotheycouldhelpfarmersmakethebestchoicesfortheir

livelihoods.

In2012,FarmShopconverteditsfirstindependentagrodealerstoFarmShopswith

cofounderFaroukJiwausinghisapartmentastheorganizationsfirsttemporaryinventory

warehouse.FarmShopmoreorlessdoubleditsnumberofshopseveryyearinitsearlyyears,

with12shopsin2014and25in2015and48in2016.AsFarmShopgrew,increasing

evidencewasaccumulatingthattheopenshopformat,qualityproducts,informativeand

helpfulservicemodelintroducedbyFarmShopwasbenefittingfarmersaswellasthebroader

ruralentrepreneurialecosystem.Forexample,otherlocalagro-dealershopsbegantocopy

theopenshopformatandlayoutofFarmShops.AsthehighestformofrecognitionofFarm

Shop’sachievement,acompetitorenteredthemarkettostartasimilarfranchisenetwork.

AsFarmShopgrewquicklyandexpandedunderthesupportoftheCIFSRFimplementation

researchproject,itworkedovertimetodevelopinformationsystemsthatcouldtestthe

fundamentalfinancialassumptionsonwhichthescalabilityofitsmodelwasbased.

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Developingtheaccounting,inventoryandpoint-of-salesystemswasachallengeinitselfasthe

pieceswerecostlyandcomplextointegratewithfewlocalsuppliersabletoprovidea

comprehensivesolution.However,whendatabegancomingin,itrevealedseveralissueswith

thebusinessmodelthatwouldneedtobeurgentlyaddressedifFarmShopwastostayona

trajectorytowardbreakevenandscale:

• Margins:FarmShopdiscoveredthatsellingagriculturalinputstosmallholderfarmers

isamuchlowermarginbusinessthananticipatedwithaveragemarginsof5percent

onsalesoverallproducts.Animalfeed,whichmadeup75percentofFarmShop’s

sales,hadparticularlylowmargins,atabout3.5percent.Supplierswerelesswilling

thanexpectedtogivediscountsevenatthevolumeofdemandgeneratedby74shops.

Theexistingnetworkofrelationshipsbetweensuppliers,distributors,wholesalers,

sub-distributorswasmorecomplexanddifficulttodisruptthanFarmShophad

anticipated.

• Overheads:Lookingatthenumbers,FarmShopfoundthatoverheadswerehigher

thanexpectedduetothestartupnatureoftheorganizationandthecommitmentto

manydirectsocialimpactactivitieslikefarmertraining.

• FranchiseeProfitability:FarmShopalsofoundthatfewerofitsfranchiseeswereas

profitableasanticipated.Insomecases,openingnewshopswerecostingFarmShop

morethanweregeneratinginsalesmarginsoncetheindirectcostsofmarketingand

supportwerefactoredin.SupportingallfranchiseesrequiredmuchmoreFarmShop

stafftimethanexpectedanddespitethis,thefranchisefailurerateremained

stubbornlyhighat10%annually.

ThedatacominginbasedonFarmShop’saccountingandinventorymanagementsystems

wereunequivocal.Withoutanychanges,FarmShopwouldnotbreakevenandcouldnotscale.

Farouk,Madisonandtheirseniormanagementteamthereforereactedwithaseriesof

strategiestoincreaserevenuesandreducecoststogettheorganizationbackonatrajectory

towardbreakevenandscale.

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IncreasingRevenues

• Moremarginsfromexistingproducts.FarmShopneededtoincreaseitsmargins.

OnestrategyFarmShopdevelopedincludedsellingmorehigh-marginproducts,for

examplehay(25%margin)andmaizebran(10%margin).Theyupdatedtheir

informationsystemtotrackandregularlyreportonsalesmarginsforvariousproduct

categoriesandassignedmanagerstargetsforincreasingaveragemarginsondifferent

typesofproducts.

• Newrevenuestreams.FarmShopalsobegantoexplorenewlinesofbusinessthat

wouldgenerateadditionalrevenuestreams.Asanexampleofthis,day-oldchickswere

addedtoFarmShop’sofferingsandtheybeganscanningtheenvironmentforother

opportunities.

• Morecompany-ownedstores.FarmShop’soriginalbusinessconceptwastohave

franchiseesownallshops.However,afterafewfranchiseesfailedtooperatesuccessful

businessesinotherwisepromisinglocations,FarmShoptookovertheownershipand

managementofsixoftheseshopsandfoundthataveragemarginsitcouldearnwere

about6%higherthaninfranchiseeownedshops.FarmShopbegantolookmore

closelyathowtheycouldincreasethenumberofcompany-ownedshopstoboosttheir

profitability.

• Supportshopsuccess.Giventhemixedsuccessofinitialfranchisees,FarmShop

developedasystemtoevaluatethequalityofitsshopownersandranktheminto

“gold”,“silver”and“bronze”categoriesaccordingtotheirperformance.“Gold”

franchiseeswererewardedwithgreatereligibilitytoaccessfinancingandparticipate

inpilotprojectstestingnewideas.“Silver”and“bronze”franchiseesweresupported

withtargetedinterventionswhereverpossibletoaddressweaknessesandoptimize

businessprofitability.

ReducingCosts

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• Separatefor-profitandnot-for-profitactivities.AmainstrategytoreduceFarm

Shop’sbusinessoperatingcostswasforFarmShoptoseparateactivitiesintothose

managedbyFarmShopretail(afor-profitorganization)andthosemanagedbyFarm

ShopNGO(aseparatenot-for-profitorganization).Byseparatingactivitiesbetween

thetwoorganizationalentities,FarmShopaimstoreducethecoststoFarmShopretail

ofthefarmertraining,researchanddevelopment,andimpactmeasurementfunctions,

whichwillbefundedthroughFarmShopNGO.

• Optimizesupplychainefficiencies.FarmShopbroughtforwardanumberof

strategiestoreducecoststhroughachievinggreaterefficienciesinitssupplychain

fromsupplierstofranchisees.Importantly,FarmShophiredanexperiencednewCEO

withabackgroundindistribution,supplychainandlogisticsmanagementwitha

mandatetobringFarmShopinlinewithbestpracticesinretailfranchiseoperations.

Activitiesbeingimplementedincludeoptimizingwarehousespaceandtruckdelivery

routes,increasingdirectpurchasingfrommanufacturers(ratherthanwholesalers)and

continuallyassessingmarketpricestoensurecompetitivenesswhileworkingtowards

reducingcostsandincreasingproductmargins.

• Closeunprofitableshops.AlthoughmanyFarmShopfranchiseeswereprofitable,a

numberhavestruggled,despitetrainingandconsistenthands-onsupportfromFarm

Shopstaff.Oneofthemostsignificantproblemsiswhenfranchiseesfindthemselves

unabletoreinvestprofitsintoinventory,leadingtoadownwardspiralinproduct

availability,customersatisfactionandprofitability.Closingtheshopsthatare

unprofitable,despitebestefforts,isreducingthedrainonFarmShopsresourcesand

allowsstafftosupportthemoresuccessfulshopswhichcreateavirtuouscycleof

incomegenerationandservingsmallholderfarmerswiththeinputsandinformation

theyneed.

Afterseveralmonthsofputtingitsnewstrategiesinplacetoreducecostsandincrease

revenues,Farouk,MadisonandtheresearchteamrecalculatedFarmShop’strajectorywith

thehelpofaspeciallytailoredfinancialmodel.Basedonanumberofassumptionsabouthow

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thefuturewillunfold,projectionsarethatFarmShopshouldnowbeabletobreakevenat

about500shops.Givenitsintensivejourneyonthepathtoscalesofar,dealingwiththeissues

socentraltothesuccessofallsocialfranchises,FarmShophasidentifiedtwooverarching

lessonslearnedforscalingasocialfranchise.

Lesson1:Abusinessmodelneedstobedevelopedandvalidatedbeforebeingscaled.If

eachnewshopopenedcoststhefranchisingnetworkmorethanitgenerates,thesystemwill

scaleitselfoutofbusiness.SocialfranchiseslikeFarmShopoperateincontextswithalotof

uncertainty–uncertaintyaboutfarmer,franchisee,supplierandcompetitorbehaviourand

preferences.Intheearlystagesoflaunchingandbuildinganewventure,manyassumptions

actasplaceholdersuntiltheycanbevalidated.Thepathtoscalecanbeseenasacontinual

processofmakingassumptionsandlearningwhethertheyaretrueornotandcontinually

adjustingbasedonfeedbackanddatafromexperienceinthemarket.AsaFarmShopboard

memberstated,“OneofthethingswehavebeenpromotingatFarmShopisthatallstaff

understandthatwe’reonajourney,we’rediscoveringnewthings,thatwedon’tknowthe

answers.”Fundamentally,beforeanorganizationcanscale,itneedstovalidatethefinancial

assumptionsunderlyingitsbusinessmodelandestablishaclearpathtoprofitabilityand

scale.

Lesson2:Todevelopascalablebusinessmodel,costeffectivelygatheringtherightdata

tovalidatekeyassumptionsisessential.

Datacollectionandmanagementsystemsareessentialtoachievingscaleastheyneedtobe

usedtogathertheinformationthatwilltestfinancialassumptionsandvalidateelementsof

thebusinessmodel.OneofFarmShop’slessonsisthatorganizationsintheearlystageof

developmentfacechallengingchoiceswithrespecttodesigningandinvestingindatasystems.

Afirstchallengeisthatdevelopingtheseinformationsystemsarecostlyintermsoftimeand

money.Thesecondchallengeisthatintheearlystagesofbusinessmodeldevelopmentand

iterationitsnotalwaysclearwhatthemostimportantdatapointsaretomeasure.Asaboard

memberexplained,“WeneedthedatasystemsandITsystemsinplacetosourcerelatively

accuratedata.Weweremakingalotofassumptionsbasedonimperfectdata.Tosomedegree

that’sfine–moststart-upsandgrowingorganizationshaveanissuewithimperfectdata

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becauseitcostsanextraordinaryamounttogetperfectdata.Asyougrowandevolve–the

otherproblemis–you’renotevensurewhatdatayouneed.Alotoftheunderlyingnumbers,

wedidn’trealizeweneededthese,orthatthesewerecriticalnumbers;wehadto

fundamentallychangethemovertimeasweanalyzedwhichdatapointswerereallycritical

andwhichwerenot.”Withoutaccurateandtimelydata,thefundamentalsofthebusiness

modelcannotbetestedandvalidated,whichisanessentialsteponthepathtoscale.

Conclusion

FarmShopisoneofthecohortofpioneeringsocialfranchisesthathaveappliedtheprinciples

offranchisingtoaddressaparticularsocialneed–inthiscase,theprosperity,foodsecurity

andlivelihoodsofsmallholderfarmers.Likeothersexperimentingwithsocialfranchising,

FarmShophasfacedthehardworkofdevelopingabusinessmodelthatcouldgenerate

sufficientrevenuestocoveroverheadcostsandallowthenetworktobreakevenandscale

throughmarketforces.Onthisjourney,FarmShopuncoveredimportantlessonsrelevantfor

allsocialfranchisesatsimilarstagesinthebusinessmodeldevelopmentprocess:makesure

yourfinancialmodelhasbeenvalidatedbeforeembarkingonscale,anddoeverything

possibletogatherthebusinessandfinancialdatayouneedtotestthemodel.Withthese

lessonsinmind,FarmShopandothersocialfranchisescanbeevenbetterequippedtoliveup

tosocialfranchising’spromiseofachievingsocialobjectivesinamoreresourceefficientand

sustainableway.