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Social franchising

Sven Bartilsson

For BFSE Milan 6/12 2012

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Social Franchising defined

• In a social franchise both the social franchisor and franchisees are social enterprises (ie businesses that trade and have a social purpose) sharing the same values.

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Social Franchising definedIn a social franchise there is:• An organisation that replicates a social enterprise

business model – the social franchisor.• At least one independent social franchisee that has

been replicated by the social franchisor.• A common brand under which the social franchisees

operate.• An interchange of knowledge between members.• An agreement that regulates rights and obligations

and secure the sustainability of the franchise as a system.

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Work done or in progress• Workshops Cannara & Genua• Conference in London• Mapping social franchisors and enquiry to BFSE

partners• Webinquiry to SF and research report• 11 case studies• Website with public directory including 23

franchisors and 9 aspiring franchisors • Survey on finance of social franchisors• Workshop with financial actors• Report

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Products• Website with public directory incl. 23 franchisors • Research report• List of social franchisors in Europe (unpublished)• 11 case studies• Articles at webpage from conference and workshops.• Report and database on finance of SF• Final report

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Available manuals• Opposite attracts - A guide to setting up a social

franchise and how social franchising can speed up the growth of social enterprise.

• Social franchising – Handbok (swedish) • Other relevant Manuals:• Social franchising - A Way of Systematic Replication to

Increase Social Impact by: Bundesverband Deutscher Stiftungen(D and Eng)

• Growing social enterprise: research into social replication by Social Enterprise Coalition UK : Dr Lidija Mavra

• A guide for franchisees by Social enterprise UK• The Social Franchising Manual by Social enterprise UK

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SF is effective way of creating jobs and speed up growth of social

enterprises• Social franchising employs at least 10000 people and

65% of them are disadvantaged.• Relatively new and have grown rapidly, • There are examples of rapid growth within less than

10 years.

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Social franchising is applicable in most sectors

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• Many models

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Social franchising combines empowerment and growth.

• The potential for empowerment by participation in management by beneficieries is possible in this growth strategy.

• Social franchising has shown ways of combining franchising with the logic of democratic and federative organisations Ex Le Mat and Core

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Knowledge on social franchising is low

• Lack of support spots. • Many interpretations of the concept social

franchising.• Many social enterprises that are franchisors do

not recognise the concept.

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Received support via a social enterprise specific support agency

• No special programmes or activities in national or European programmes to support social franchisors.

• No activities or instruments in EU programmes designed for development of social franchisors.

• In UK and Sweden SE agencys has run programmes towards potential social franchisors. In Polen and Italy projects on social franchising.

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The “pilot” social enterprise has often been funded by ESF.

• More than 50% of the respondees in our research has been funded by the ESF.

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There is a need of a “turbo step” in ESF and other programmes

• Investments in development of social enterprises could be better used if there was a distinct dissemination phase with lower co-financing criteria’s.

• Focus today is start-up.• The horisontal objective, innovation, could be an

obstacle.

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Credibility in doubt.

• Franchising arouses suspicion normally. • A first step towards a quality standard and quality

mark is a code of conduct.• ESFN as organisers of social franchisors in Europe

is the natural developer of a code of conduct and quality mark.

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Preliminar: A financial gap.

• The 2:nd phase of a social franchisor, when developing the experiences from the original business to a franchise including the first franchisee, is a financial bottleneck.

• Fundings to start-up social enterprise is a minor problem and there is rather good opportunities to finance the 3:d step, the growth phase.

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Prel: SF provides an opportunity for high social impact on social

investments.• Preliminar: Social investors investing in social

franchisors has created high social impact at low risk.

• SF reduces cost for due diligence for social investors

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SF an effective way for your social enterprises to grow.

• Scale without sacrificing the economies of remaining small and risking the management model based on high involvement of stakeholders

• Expand to new locations without a well-capitalized business.

• A tool for quality management.• Organise systematic learning in order to create,

test and implement new methods to improve the business model.

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The SF success factors

• A proven and replicabel social business • Social value an added value, focus service delivery!• A capacity for a slow initial growth. • Careful selection of franchisees! Entrepreneurs!• A rooted network: values consistent in the network

and with clear roles• Access to financial resources• Keep true to your social mission• Mutuality and community of practise

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To MA ESF, DG EMPL, National and regional governments

– Social franchising is an effective way of creating jobs and speed up growth of social enterprises– Social franchising combines empowerment and growth– The “pilot” SE and the development as SF has often been funded by the ESF.– There is a need of a “turbo step” in ESF and other programmes.– Preliminar: There is a financial gap in the growth process of a social franchisor

• Design programmes, activities and calls so that SE that might be replicable could be developed.

• Design programmes to scoop the profit of previous investment in social enterprise. A new perspective on innovative.

• Make social franchising a part of transnational activities.Proposed Activities:• Via BSFE to the DG EMPL• Seminars in each country to target stakeholders in implementation/design of

national/regional programmes.• Take part at and present findings at conferences.

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To DG ENT & DG MARKT ??– Social franchising is an effective way of creating jobs and speed up growth of

social enterprises– Social franchising is applicable in most sectors– Preliminar: There is a financial gap in the growth process of a social franchisor.

• Support a code of conduct, R&D and networking activities among social franchisors.

• Make sure that conditions for social franchising is considered in regulation of social investment funds

Activities• Discussion about funding opportunities for a project on

Code of Conduct via SBI or other ways.• Dialogue with DG Markt / EMP

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To Social Enterprise support organisations

– Social franchising is an effective way of creating jobsand speed up growth of social enterprises

– Knowledge on social franchising is low– Those that have received support has got it via a social enterprise

specific support agency and not via a designed programme on social franchising

• Inform and train staff on social franchising. Start programmes on social franchising directed to successful social enterprises

Activities:• National seminars on social franchising inviting

social enterprises and their support organisations• Take part at and present findings at conferences.

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To Financial actors – Social franchising is an effective way of creating jobs.– Preliminar: There is a financial gap in the growth process of a social

franchisor.– Preliminar: Social franchising provides an opportunity for high social impact

on social investments.– SF reduces cost for due diligence for social investors

• Search for social enterprises that are franchisable. Offer seed capital to create possibilities for venture investments

Activities• Article with interviews of successful investments in social

franchise spread in network of FEBEA, EIF, EVPA and others.• Investor stories at social franchising at EVPA or other

meetings.

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To social enterprises – Social franchising is an effective way for your social

enterprises to grow.– The success factors of a social franchise

• Survey the opportunities of SF!

Actions: • National seminars in BFSE countries• A new European Conference on Social franchising, i

cooperation with members in Social Economy Europe, incl Cooperatives Europé, CEDAG and others.

• Take part at and present findings at conferences.