The promise of social franchising
As we know, social enterprise is taking an increasing role in helping us to tackle some of the world’s major social and environmental challenges. Social enterprise is now growing out of its infancy and in this transition some of the focus needs to shift away from generating new ideas towards scaling and replicating existing proven models.
One of the most effective methods emerging to help social enterprises replicate their efforts and multiply their impact has been to develop a franchise approach — what has become known as social franchising. This method has been especially successful as it allows the spread of a tried and tested model, whilst leaving room for adapting to local need. Franchises in general have a much higher success rate, with around 90% still operating after 5 years from launch, compared to 30% of other types of business start-ups.
Social franchises are found in many places around the world: examples of success stories include Foodbank and Care and Share Associates in the UK, CAP supermarkets in Germany, Husk Power Systems in India, Healthstore in Kenya, and PSI, a global social franchise.
The strength of the social franchising model allows social enterprises to benefit from the scale of a larger organisation as well as the flexibility and knowledge that come with being a local organisation. The diagram below highlights some of the major benefits of this structure.
There is a lot of excitement around social franchising but, as with any other method to scale or replicate an organisation, it is far from being a silver bullet. There are other options available (e.g. partnership, licensing, joint venture) and every individual situation requires careful assessment before selection of an appropriate strategy. Systematic selection of an unsuitable approach to growth may not only result in individual failures but, arguably worse, the undermining of what could be a powerful model for social change.
Even for those social organisations for which a franchising model would be suitable, success is often dependent on years of testing and perfecting the model to make sure it is ready for rapid scaling. Forcing the pace of replication and being ill-prepared to manage the challenges are the principal reasons that attempts at social franchising can fail.
Social franchising, if used effectively, can be critical to driving social change at a pace that has not yet been realised. It is our responsibility to ensure that this happens.
