Social franchising is the application of
commercial franchising concepts to achieve
socially beneficial ends, rather than
profit
Profit may refer to:
Business and law
* Profit (accounting), the difference between the purchase price and the costs of bringing to market
* Profit (economics), normal profit and economic profit
* Profit (real property), a nonpossessory intere ...
.
Overview
Social franchising is the application of the principles of commercial franchising to promote social benefit rather than private profit.
In the first sense, it refers to a
contractual relationship wherein an independent coordinating organization (usually a
non-governmental organization
A non-governmental organization (NGO) or non-governmental organisation (see spelling differences) is an organization that generally is formed independent from government. They are typically nonprofit entities, and many of them are active in h ...
, but occasionally a governmental body or
private company
A privately held company (or simply a private company) is a company whose shares and related rights or obligations are not offered for public subscription or publicly negotiated in the respective listed markets, but rather the company's stock is ...
) offers individual independent operators the ability to join into a franchise network for the provision of selected services over a specified area in accordance with an overall
blueprint
A blueprint is a reproduction of a technical drawing or engineering drawing using a contact print process on light-sensitive sheets. Introduced by Sir John Herschel in 1842, the process allowed rapid and accurate production of an unlimited number ...
devised by the franchisor. Once joining the network, operators are given the right to employ previously tested incentives including: professional training, use of brands or brand advertisements, subsidized or proprietary supplies and equipment, support services, and access to professional advice. Members also gain beneficial spin-off effects such as increased consumer volume and improved reputation due to brand affiliation.
Franchisees must adhere to a range of requirements including: providing socially beneficial services, meeting
quality
Quality may refer to:
Concepts
*Quality (business), the ''non-inferiority'' or ''superiority'' of something
*Quality (philosophy), an attribute or a property
*Quality (physics), in response theory
*Energy quality, used in various science discipli ...
and pricing standards, undergoing mandatory education on provision of services, subjecting outlets to
quality assurance
Quality assurance (QA) is the term used in both manufacturing and service industries to describe the systematic efforts taken to ensure that the product(s) delivered to customer(s) meet with the contractual and other agreed upon performance, design ...
mechanisms, reporting service and sales statistics, and occasionally, paying fixed or
profit-share fees.
Social franchises have been used for
primary health services, pharmaceutical sales of essential drugs, HIV testing and counseling, and reproductive health services in the developing world.
A second application of social franchising is as a means of enabling
social enterprise
A social enterprise is an organization that applies commercial strategies to maximize improvements in financial, social and environmental well-being. This may include maximizing social impact alongside profits for co-owners.
Social enterprises ca ...
s and the
social economy
The social economy is formed by a rich diversity of enterprises and organisations, such as cooperatives, mutuals, associations, foundations, social enterprises and paritarian institutions, sharing common values and features:
* Primacy of the i ...
to create more employment for disadvantaged people and achieve social aims. This is done principally by enabling joint working and knowledge sharing and transfer. Th
European Social Franchising Networkhas identified over 60 social franchises of this type in Europe, which employ over 13,000 people and more recently in 201
The International Centre for Social Franchisingidentified 140.
The largest of these is De Kringwinkel in Flanders employing 5,000 people. Others, like the Le Mat hotel and tourism social franchise or the School for Social Entrepreneurs operate in more than one country. Social franchising provides an opportunity to rapidly grow the sector to the benefit of disadvantaged people and society more generally.
Support Organisations
The international Centre for Social Franchising(ICSF) was founded to help replicate proven social ventures to scale. They have a number of usefu
resourcesand have published papers such as Investing in Social Franchising
which looks at the viability of investment into franchised social enterprise in the UK and Social Franchising: Innovation and the Power of Old Ideas
which is a comparison between McDonald's and the social franchise Foodbank.
The ICSF has recently (2015) developed and launched
social franchising toolkitwith
NESTA
Nesta (formerly NESTA, National Endowment for Science, Technology and the Arts) is an innovation foundation based in the UK.
The organisation acts through a combination of programmes, investment, policy and research, and the formation of part ...
,
Bertelsmann Foundation
The Bertelsmann Stiftung is an independent foundation under private law, based in Gütersloh, Germany. It was founded in 1977 by Reinhard Mohn as the result of social, corporate and fiscal considerations. As the Bertelsmann Stiftung itself h ...
,
London School of Economics
, mottoeng = To understand the causes of things
, established =
, type = Public research university
, endowment = £240.8 million (2021)
, budget = £391.1 millio ...
and others to help the best social ideas develop as a franchise. The group recently carried out research into replicable health care models with significant social benefit
with
GlaxoSmithKline
GSK plc, formerly GlaxoSmithKline plc, is a British multinational pharmaceutical and biotechnology company with global headquarters in London, England. Established in 2000 by a merger of Glaxo Wellcome and SmithKline Beecham. GSK is the ten ...
the pharmaceutical company, published in May 2013.
Social franchising for health services
There are a number of social franchising set ups in the area of health care and social mobility. According to the components of Human Development Index, "Health" and "Living Standards" are the two major components of HDI (Human Development Index). Social franchising for essential health services is an emerging technique used by governments and aid-donors in developing countries where a substantial percentage of health services are provided by private sector (including non-profit NGOs and private for-profit) to improve access,
equity
Equity may refer to:
Finance, accounting and ownership
* Equity (finance), ownership of assets that have liabilities attached to them
** Stock, equity based on original contributions of cash or other value to a business
** Home equity, the dif ...
,
effectiveness
Effectiveness is the capability of producing a desired result or the ability to produce desired output. When something is deemed effective, it means it has an intended or expected outcome, or produces a deep, vivid impression.
Etymology
The ori ...
, and quality. Clinical franchising often takes the form of a fractional model where franchised services are added to an existing medical practice, but also can exist as a stand-alone practice wherein the site exclusively provides franchise supported services or commodities. Social franchising has been used to deliver a wide range of services including
DOTS tuberculosis treatment, sexual transmitted infection management,
primary care, and HIV / AIDS treatment.
Strengths and weaknesses of social franchising
Strengths
By organizing small independent providers into larger units, social franchises can yield
returns to scale
In economics, returns to scale describe what happens to long-run returns as the scale of production increases, when all input levels including physical capital usage are variable (able to be set by the firm). The concept of returns to scale arises ...
in investment in
physical capital
Physical capital represents in economics one of the three primary factors of production. Physical capital is the apparatus used to produce a good and services. Physical capital represents the tangible man-made goods that help and support the produc ...
,
supply chains,
advertising
Advertising is the practice and techniques employed to bring attention to a product or service. Advertising aims to put a product or service in the spotlight in hopes of drawing it attention from consumers. It is typically used to promote a ...
, and worker training and supervision.
Additionally, social franchises can offer the ability to: faster
scale up programs, decrease transaction costs, provide uniform services to a broad market,
collectively negotiate financial reimbursement mechanisms, and replicate
best practice
A best practice is a method or technique that has been generally accepted as superior to other known alternatives because it often produces results that are superior to those achieved by other means or because it has become a standard way of doing ...
services among a large group.
Franchisees can also
cross-subsidize less profitable services with the more profitable ones supported by the franchisor. The use of brand advertising makes social franchising compatible with
social marketing
Social marketing is a marketing approach which focuses on influencing behavior with the primary goal of achieving "common good." It utilizes the elements of commercial marketing and applies them to social concepts. However, to see social marke ...
.
[Private Healthcare in Developing Countries](_blank)
/ref> In addition, social franchising for health services allows an expansion of services because of cross-subsidization, addition of less-profitable services if fractionally franchised, and access to costly medicines if subsidized by the coordinating organization.
Weaknesses
Several inherent logistical and economic weaknesses are present within the social franchising model. These include the difficulty in standardizing medical care among participants, the need for networks to be sufficiently large to attain an economy of scale, the cost and challenge of regulatory oversight of outlets, and the need to base organizational decisions on the population demand which may not maximize quality or minimize cost. There also exists the possibility of “tragedy of the commons
Tragedy (from the grc-gre, τραγῳδία, ''tragōidia'', ''tragōidia'') is a genre of drama based on human suffering and, mainly, the terrible or sorrowful events that befall a main character. Traditionally, the intention of tragedy ...
” wherein franchisees provide low quality, low cost due to incomplete monitoring. Social franchising for health services runs the risk of overly procedural, “cookie cutter” medical provision, overtreatment of disease conditions, and the possibility of fraud if oversight is not present.
Social Franchise Enterprises
The Social Franchise Enterprise is a type of Social initiative directed to achieve development goals through private ventures that provide goods and services to unserved markets, at a viable price.
The Social Franchise enterprise creates self sustainable economic activity for the franchisees by using the franchise model to provide them with Capacity Building (know-how & training), Access to Market (bulk procurement of standard supplies, network clients, brand) and Access to Credit (benchmarking leading to Bankability). Franchisees then become capable to supply a given population with much needed goods or services.
By maintaining the transaction element, the Social Franchise Enterprise generates the revenue to both the Franchisees and to the Social Franchiser, who becomes self sustainable and can further extend its footprint and further supply unserved markets, enforce monitoring and continue to provide added value services to the Franchisees network.
Telephone/communication kiosks have been studied by the WB since 1995. Currently, rural electrification and rural mobile providers represent attractive fields to develop Social Franchise Enterprises that create economic activity and provide communities with electricity and access to communications.
History of Social Franchise Programs
The first significant implementation of social franchising was conducted in 1995 by th
Greenstar
franchise in Pakistan. Since its inception, Greenstar has trained over 24,000 providers, and provides family planning, sexual and reproductive health services, maternal and child health services, and tuberculosis diagnosis and treatment through over 80,000 retail outlets. Since then, over 35 additional social franchise programs have arisen, with much of the increase in the number and size of social franchises occurring in the last four years. Franchises have additionally expanded their services from mostly family planning to testing and treatment of malaria
Malaria is a mosquito-borne infectious disease that affects humans and other animals. Malaria causes symptoms that typically include fever, tiredness, vomiting, and headaches. In severe cases, it can cause jaundice, seizures, coma, or death. S ...
, tuberculosis
Tuberculosis (TB) is an infectious disease usually caused by '' Mycobacterium tuberculosis'' (MTB) bacteria. Tuberculosis generally affects the lungs, but it can also affect other parts of the body. Most infections show no symptoms, in ...
, and HIV
The human immunodeficiency viruses (HIV) are two species of ''Lentivirus'' (a subgroup of retrovirus) that infect humans. Over time, they cause acquired immunodeficiency syndrome (AIDS), a condition in which progressive failure of the immune ...
/ AIDS
Human immunodeficiency virus infection and acquired immunodeficiency syndrome (HIV/AIDS) is a spectrum of conditions caused by infection with the human immunodeficiency virus (HIV), a retrovirus. Following initial infection an individual m ...
.
Existing Clinical Social Franchises
External links
The International Centre for Social Franchising
* ttp://vitalocstation.com/vitaloc-station-social-franchising-%E6%B4%BB%E6%A8%82%E7%AB%99-%E7%A4%BE%E4%BC%81%E5%8A%A0%E7%9B%9F Why Vitaloc Station targets health and social mobility issues{dead link, date=May 2018 , bot=InternetArchiveBot , fix-attempted=yes
Human Development Index
References
Health care
Franchising
International development
Social economy