What’s MICRO FRANCHISING?
This article appeared in Issue 3#4 (May/June 2009) of Business Franchise Australia & New Zealand
As more problem-solving franchisees embrace social responsibility, could Micro Franchising be the next big thing in achieving high social and economic impact?
In Africa this year, while listening to locals tell stories of why aid doesn’t work, I attempted to explain what Micro Franchising was. This was difficult when they hadn’t even heard of McDonald’s. The best I could come up with was ‘eternal enterprise’ and that helped the penny drop.
What is a Micro Franchise?
The Intercept Poverty website says: “A replicable business system on a micro-scale that fosters economic self reliance.”
“Can’t we do what McDonald’s and Burger King have done in the US?” - Govindappa Ventataswamy – Founder, The Aravind Eye Care System
In a nutshell, Micro Franchising is a mini franchise with a smaller dollar value entry point relative to the economy it’s working in. Its aim is to both solve big problems and empower local enterprise where its impact a) is high and b) counts most. Its power lies not in sale price of actual franchise units, but more the reach and volume of business that could be put through the franchise.
For instance, there are 85 million people in Ethiopia. These people fit into the size of South Australia. That’s a big franchise territory and a big client base. Imagine the opportunity, economic self reliance, and leadership that could be developed there.
In the interior of Australia, native berries are being farmed and distributed by Indigenous communities who are learning the art of enterprise with dignity.
Micro Franchising’s impact lies in the transfer of enterprise resources (new ways of thinking) and enables the impoverished to lift themselves up.
Micro Franchising is a distribution mechanism that when expanded open up markets for franchise systems. It’s ideally suited to underdeveloped markets, and is ripe for doubling as social impact mechanism. What I’m saying is that a micro franchise could be your franchise’s next corporate social responsibility project that goes beyond philanthropy. Small idea, big impact!
Problem-Solving for Social Impact
The good news for franchisees is that if you wanted to more than ‘make a difference’ and create a high impact social solution within your brand or seeded from your brand, this could be for you.
As a leadership and enterprise solutions business, we recently launched a process called, Intercept Same Page. It’s aim is to enable business’ do what I’ve just described. We gather teams within an enterprise and harness discretionary time, energy and creativity. We identify a problem in the world that could be solved, and make a plan to do it. The upside for the participating team is that enterprise thinking, problem-solving savvy, teamwork and leadership are fostered for the brand. The social impact upside is that the context of the project is socially responsible. The location of the problem can be anywhere you chose, here or overseas. Your choice.
Strategic Framework for Social Change
In the year 2000 the Millennium Development Goals were signed on for by many countries all signed on to attain 8 global goals. While they are officially the UN Millennium Development Goals, they’re also referred to as the MDGs. Whatever you call them, they are a solid strategic framework providing hyper principles to aspire to. They link strategic intent with your problem solving projects. They provide an excellent guide for social impact.
There are 8 Millennium Development Goals:
1. Eradicate extreme poverty and hunger
Reduce by half the proportion of people living on less than a dollar a day
Reduce by half the proportion of people who suffer from hunger
2. Achieve universal primary education
Ensure that all boys and girls complete a full course of primary schooling
3. Promote gender equality and empower women
Eliminate gender disparity in primary and secondary education preferably by 2005, and at all levels by 2015
4. Reduce child mortality
Reduce by two thirds the mortality rate among children under five
5. Improve maternal health
Reduce by three quarters the maternal mortality ratio.
6. Combat HIV/AIDS, malaria and other diseases
Halt and begin to reverse the spread of HIV/AIDS
Halt and begin to reverse the incidence of malaria and other major diseases.
7. Ensure environmental sustainability
Integrate the principles of sustainable development into country policies and programs: reverse loss of environmental resources
Reduce by half the proportion of people without sustainable access to safe drinking water an basic sanitation
Achieve significant improvement in lives of at least 100 million slum dwellers, by 2020
8. Develop a global partnership for development
Develop further an open, rule-based, predictable, non-discriminatory trading and financial system.
Address the special needs of the least developed countries, landlocked countries and small island developing States.
Deal comprehensively with developing countries’ debt
In co-operation with developing countries, develop and implement strategies for decent and productive work for youth.
In cooperation with pharmaceutical companies, provide access to affordable essential drugs in developing countries
In cooperation with the private sector, make available the benefits of new technologies, especially information and communication technologies
As you can see here, there are many areas enterprise thought and innovation could solve.
In September 2008, the world’s leaders gathered in New York to review the progress of the MDGs. While on the same New York flight, I literally bumped into World Vision’s Tim Costello. He would be presenting at the UN. In our brief exchange I took the opportunity to raise my vision to engage private sector enterprise in working toward the MDGs through franchising models. This exchange was timely and encouraging. It showed me the mobilising force of the spirit of doing good works. I left our thought exchange encouraged and clear in how to act and enrol others.
One Franchise System’s Response
In response to these MDGs, Intercept established Intercept Poverty. We have commenced two enterprise projects and the seeds of an Enterprise centre in Ethiopia. Why? It is a nation referred to in the 8th MDG, as a leased developed country (LDC). This has also been our entrée into practising Micro Franchising.
Corporate Social Responsibility and the Global Compact
In addition to the MDGs, there is an initiative called the Global Compact. This Global Compact is a framework provided for corporations from which much of the Corporate Social Responsibility (CSR) Policy we see is derived. Corporations sign on and agree to the Global Compact and then link their strategic policies to this. These include attending to corruption and meeting certain sustainability targets. This presents corporations with a set of very interesting, complex and challenging guidelines to function within.
Big Business Vs Smaller Enterprise
When it comes to social impact there are extraordinary examples of big business philanthropy. An awareness of the MDGs (together with knowledge of Micro Franchising) however, offers an opportunity for smaller enterprise to respond to these problems in meaningful and big ways.
Social entrepreneurship is a term we will see more of and I will elaborate in future articles. In the meantime you can read my blog and twitter which are fresh with what’s happening in the world of social entrepreneurship. Intercept’s clients have developed special interest groups of our business leader clients and their teams interested in developing their own social entrepreneurship.
The BIG deal for Franchisees
David Stoker is the US based author of http://microfranchising.blogspot.com.
A revenue analyst for Ashoka. David says, “I am passionate about Micro-Franchising because I see the range of benefits to families, the potential of scale, and the current moment in history coming together to make a compelling case for micro franchising. It builds on the momentum and success of micro finance and addresses many of its limitations. I think micro franchises will create jobs, transfer training and knowledge, and bring higher quality products and services to communities. All of that coupled with market forces, corporate resources, local ownership, the systems, the scale, I find it very exciting.”
How Franchising will Intercept Poverty : MDG No. 1
Consider this. An enterprising franchisee team here in Australia, develops intellectual property and decides to share it. A replicable system based on their experience is developed. This team is engaged in finding new overseas emerging markets. Enter some problem solving thinking with a social impact and profit making agenda, along with research, commitment and a plan. Scale it to local entry point levels, (even have it as an annexe brand to the main brand) and presto, you have entered the realm of Micro Franchising. Develop one new brand or several. Support it from within the resources you have already built or set up a new system with high social impact.
“I am an optimist. No problem cannot be solved” - Bill Gates
Are you the next Bill Gates?
Bill Gates recently released a jar full of mosquitos into an auditorium of enterprise thinkers so that his audience could ‘experience’ the risk from malaria. (MDG#6).
Experiencing something makes all the difference. Now I’ve started ‘experiencing’ micro-franchising projects I experience this model as leadership in action.
This model has a high social impact focus. It uses all the good stuff of franchising and goes beyond success, to significance. Rather than just ‘make a difference’ it truly changes lives. Micro Franchising is where the rubber hits the road for social impact enterprise. It is already having a significant impact in the world. We in franchising are in the box seat.
How can we design the future with a social entrepreneurship and micro franchise combination framed by the MDGs? As knowledge and new thought builds in this direction we produce solutions that can be showcased at future Intercept Social Entrepreneur & Micro Franchise Awards.
I identified at least 10 different opportunities for Micro Franchising in Africa, from workforce solutions to bookkeeping. The opportunities were endless.
Tanya Lacy is the founder of Intercept a franchised leadership and enterprise solutions business. She is also co-founder of Intercept Poverty, service & social innovations for underdeveloped communities.
Tanya’s innovation is leading business people into the world of Social Entrepreneurship and Micro Franchising.