Using the Franchising Model for Social Change


Feb 10, 2017

The question of entrepreneurship particularly in the social enterprise sector is of huge interest to an economy desperately seeking sustainable scope. And many believe that great ideas and innovation could reach their full potential and become market viable, if more would-be entrepreneurs embraced the rise of social franchising, rather than being wedded to the idea of 'doing it alone'. This sentiment is certainly shared by the Founder and CEO of the International Centre for Social Franchising, Dan Berelowitz.

Dan points to the frustration he has felt, watching small and brilliant social enterprises reach hundreds of customers when in fact they should be reaching many hundreds of thousands of customers, so strong and powerful are their ideas. He felt a strong sense of confusion, wondering why these small programmes were seemingly unable to grow, develop and export to new markets and evolve to tackle the size and magnitude of the problems they were passionate about solving. In a nutshell why couldn't these bringers of big ideas with great social purposes, not grow sufficiently to make the most of them?

Funders also seem to be focused on start-ups for their material support. It seems that very few awards exist for investment within existing projects. The fact is, that the social enterprise sector is packed with well-meaning people who are desperate to see fast-paced change. Some are perhaps led by passion and possibly even ego alone and believe that success will best be found through their own efforts and by creating their own programmes rather than investing in existing programmes, or working to scale up small and struggling programmes which just need a little extra support.

Franchising and the social sector

The concept of social franchising is very interesting when applied to this sector. It suggests that we can usefully apply the economic model of commercial franchises, to the social enterprise sector and see positive results. Note that this concept doesn't involve stripping out passion and social values - but rather, implementing the proven franchising model to ensure strong growth prospects and to help the target groups that these programmes seek to benefit. At its heart, the idea of social franchising involves maintaining all the excellent qualities of a small charity, whilst being able to achieve high growth and scale, through franchised replication further benefiting other groups and communities in the process and extending reach to a wider audience of beneficiaries.

Franchising as a concept also benefits from being so well-known. In fact, whether we are aware of it or not, franchising defines the majority of our high street. It influences the food we eat and the coffee we drink and is worth a cool 13.4 billion to the UK economy alone!

Franchising offers the opportunity to scale up a social enterprise and prevent the obsession with endless start-ups which cannot all be sustainable. The benefit lies in committing to and investing in, a programme that works already. Exporting a successful social model in one community, to another community in equal need is a valuable outcome of social franchising and a workable one. The Body Shop, McDonalds and other big franchised brands have already expressed a belief that the commercial franchising model can apply just as fruitfully to socially-driven enterprises.

And of course, the entire concept of social franchising is actually an old one. It's been used to great effect with the Youth Hostel Association, Coram Life Education, Le Mat and more. But today it's the scope of potential for social franchising that is fascinating and the Big Lottery Fund has commissioned a piece of research to fully establish its value within the British economy.

Strong examples of success

Dan Berelowitz from the International Centre for Social Franchising has carried out research which compares the Trussell Trust food-bank, with a global high-street brand, McDonalds. Both are perfect examples of the successful franchising model. Foodbanks exist to provide at least three days worth of food and support to those experiencing a crisis, here in the UK. The first franchised foodbank was opened in 2004 and in 2010 the need for assistance soared. As a result, the number of Foodbanks had leaped to over 200, from the original 55, by 2010. Over 300 now exist and two new ones open each week, primarily driven by church groups meeting local community needs. A template of the Foodbank can be bought for a fee of just 1,500 and it's a tried-and-tested and hugely successful programme to tackle food poverty. It's also a great example of how a social enterprise has used franchising to reach scale and extend across multiple communities, whilst providing the necessary local and community driven response.

Another example is McDonalds; often viewed as a strange choice for social enterprise. However, the lessons from its franchising approach are applicable to the social field. Almost 70% of McDonald's franchises are owned by strongly-managed UK franchisees, selected for their ability to 'turn the wheel faster', rather than reinvent it from scratch. And as a result, McDonalds still manages to grow. The brand offers the following maxims for success picking franchisees carefully, investing in their development, creating and connecting a network and establishing clear financial agreements, which are shared. They suggest too, being sensitive to local environments and their needs and avoiding standardisation at the expense of local and cultural sensitivities. This is shown in the example of McDonalds now opening their first vegetarian restaurant, in India.

Compare this to the fortunes of celebrity, Madonna, who has seen her educational charity fail to become successful and lost money in the process. The fact is, like business, start-up enterprises often fail. And although building an organisation to scale will always be a tremendous challenge, social franchising may just be the way to manage it.