Socialfranchising is the process by which people apply commercialfranchising concepts and ideas so as to achieve socially beneficialoutcomes. The concept behind social franchising is to bring peopletogether to work and share ideas. The person operating the franchiseaims at achieving a socially beneficial goal using a business modeland thus, earns profits. The social goal could be an activity such ashelping disabled people to start a small business so as to becomeeconomically independent. The social franchise must make profits sothat it can continue operating and thus, be self sufficient. Mostsocial franchises are co- owned by the franchisor and the franchisee,although the franchisee pays loyalty fees to the franchisor. Thefranchisor is also responsible for regulating the operations of thefranchise.
Commercialfranchising involves using another company’s successful businessmodel and trademark so as to benefit from the success of thefranchisor. The franchisee pays the franchisor royalty fee for atrademark and training costs. Commercial franchising is a profit-making venture that endeavors to use the success of a trademark totrade and benefit from an established franchise (BeanstalkNewsletter 2).The franchise contract lasts for a specific period. It saves thefranchisee the trouble of starting and establishing trademark, whichmay be expensive and often takes long to establish. The franchiseetrades in the franchisors goods or services as a business model issimilar to that of the franchisor.
Commercialfranchising helps a business owner to get into an already successfulbusiness. It is also helpful when a business person is entering intonew markets as an already established business does not take theeffort to start and operate. The franchisee must cooperate with thefranchisor’s business code of conduct as anything outside theagreed terms is a breach of the business contract. The purpose ofcommercial franchising is to trade and make profits for both thefranchisor and the franchisee.
Socialfranchises are usually run by non- governmental organizations as theyare mostly concerned with offering social services. Social franchisesusually subsidize the services offered so that the beneficiary doesnot incur a high cost (European Network 1). Themodel uses the same model as the commercial franchises, but thesocial franchises primary focus is on offering social services thatare helpful in society. The social franchisee offers similar servicesto those offered by the franchisor and they receive training andguidance from the franchisor.
Socialfranchising is a model of commercial franchising. The socialfranchise is established in accordance with the business model of thefranchisor, just like in commercial franchising (European SocialFranchising Network 1). The main goal of a franchise is to establisha business following the model of an established model so as to reapfrom the success that is occasioned by using a business model. Thefranchisee follows the actions and business processes of thefranchisor. The franchisor offers training to the franchisee so thatthe franchisee can grasp the concept of business model used by thefranchisor.
Thesocial franchise also exists to make profits just like the commercialfranchise. The social franchisor must make profits so as to sustainits operations. Commercial franchises are also based on makingprofits by using the business model of a well established business.The social franchise offers services at a fee so that is can makemarginal profits to sustain its operations (Ahlert& Hans 35).This is similar to a commercial franchise which must also makeprofits as it is a business entity. The core idea of the franchise isto use an established business model so as to make profits.
Bothsocial and commercial franchises use the trademark of the franchisorfor operations. They also offer goods and services that are offeredby the franchisor. Most franchises are found in cases where thefranchisee wants to establish a business of the organization thatoffers similar goods or services of an already established business(Ahlert& Hans 130).The franchisee decides to use an already established trademark so asto reap its benefit instead of going into competition. The franchiseespends little money and effort trying to establish a unique brand.The franchisee uses the trademark of the franchisor, which is alreadyestablished in the area where the franchisee establishes his businessand gains ground quickly.
Thesocial and commercial franchises offer the goods or services offeredby the franchisor. The franchisor dictates the goods and services tobe offered. The products offered may be branded products of thefranchisor or products from specific brands as recommended by thefranchisor. Social franchises offer services that are similar tothose offered by the franchisor, and follow the same rules andprocedures (European Network 1). Commercialfranchisors offer brands that are offered by the franchisor and usethe same business model.
Thefranchisor in both cases offers skill development for the franchisee.The franchisor is often interested in protecting the business’brand. The brand is established through standard methods of operationwhich lead to its success. The standard procedures become synonymouswith the brand. The franchisor thus does not give the franchisee theliberty to develop his own skills and modes of operation (Baxter81).The franchisee’s trademark is unique and customers identify abusiness with the modes of operation. It is for this reason that thefranchisee offer skill development so as to ensure that franchisesestablished with its trademark are maintained and are uniform.
Bothfranchises also have strong community engagement (European SocialFranchising Network 1). The purpose of the social franchise is tooffer social services that are helpful to the community. This meansthat the franchise must understand the needs of the community so asto offer suitable services. Commercial franchises also succeed fromoffering goods and services that are acceptable and suitable to thecommunity in which they operate. Both franchises work closely withthe community so as to guarantee success. The purpose of both is toserve the community well so as to make a profit. They must,therefore, engage with the community at different levels so as toremain relevant and earn profits.
Bothfranchises use franchising as an expansion strategy. When a businessor non- governmental organization wishes to expand into newterritories, the process may be tricky and costly, especially insocially and culturally different areas than those of its area ofoperation. In such cases, the business uses franchises that arealready in existence, in the areas as they have the technicalknowledge of how to operate in the environment (BeanstalkNewsletter 25).In most cases, it is challenging to compete against establishedfranchises. A business that wishes to start operations in suchenvironments thus, acquires a franchise, and receives technicalsupport on how to operate so as to make profits. This also reducesthe cost of advertising and brand strengthening in new environments.
Bothmodels also operate as business partnerships for the franchisor andthe franchisee. The franchisor offers technical knowledge and supportto the franchisee and reaps benefits from loyalty fees. Thefranchisee, on the other hand, offers capital for starting andoperating the business. The franchisee is also responsible for thedaily running of affairs of the organization in accordance to thebusiness model of the franchisor. The joint operation of the businesswith each party offering a different support to the organization is apartnership deal between the franchisor and the franchisee.
Socialand commercial franchises are also operated as networks, with thefranchisor being the centre of uniformity. The franchisor isresponsible for ensuring that the franchisees maintain a harmoniousand standard mode of operation so as to maintain high standards forthe brand. The franchisor also offers consistency of operation byensuring that the franchisees do not deviate from the standard modelthe consistency of operation is one of the focal points off thesuccess behind franchises (Alon150).The franchisor must ensure that the operations of the franchise areconsistent and standard for purposes of maintaining success. Thefranchisor maintains standard operations through monitoring andcontinuous training of the franchisee.
Inboth franchises, there is a central individual or business which hasestablished a successful concept that is replicable. Franchises oftenstart from small operations, which focus of solving a particularproblem or offering particular goods and services to the society. Thesmall operation learns through operation and consistency how to beeffective in its area of operation (Ahlert& Hans 61).Through consistency and constant improvement the small organizationestablishes a tested model of operations, which enables it to succeedand expand. Others who wish to offer a similar service then adopt thetried and tested model for their own operation as it is more likelyto succeed that a new mode of operation. This is often the case forboth commercial and social franchises.
Bothsocial and commercial franchises have protocalized systems ofoperation. At the centre of the protocol is the owner of thefranchise who makes the major decisions regarding the franchise andhow it is to be operated. The individual franchisees cannot not makeunilateral decisions regarding the franchise (European SocialFranchising Network 1). The franchisees are only responsible for themanagement of their organizations in accordance to the franchisor’smodel. Decisions in franchises are made through a protocol system andthe franchisee does not have the right to make major decisionsregarding the franchise. This slows down the decision- making processas consultations must be made and any decisions made are appliedacross the board for purposes of uniformity.
Bothcommercial and social franchises also have two major models ofoperation. One model is where the franchisee offers the very sameproduct and services offered by the franchisor without anyalterations. The franchisee copy’s the franchisor’s businessmodel and products. The second case is where the franchisee copy’sthe core model and a few products or services (BeanstalkNewsletter 22).In this case, the brand name and the franchisor’s strongestproducts are copied without any alterations. However, the franchiseein such a case is allowed to make minor changes and alterations tofit his needs and business aspirations. The franchisee takesadvantage of the franchisor’s success to establish a uniquebusiness.
Inmost cases, when a franchisee wishes to establish a business in newlocations, the franchisee may choose to use only one aspect of thefranchisor’s model to establish the organization. This is the casefor globally recognized models, where the franchisee adopts an aspectsuch as the trademark (Ahlert& Hans 15).For example, if a person wishes to establish a charitableorganization is a country in Africa, a person can use the brand nameof a locally recognized charity organization. The organization,however, may choose to offer different services from those offered bythe owner of the brand. In such a case, the franchisee seeks to usethe name of the franchisor to create recognition, as opposed totrying to popularize a new brand.
Commercialfranchises are profit driven only. Social franchises are also profitdriven, but their core purpose is to offer services to the communityin which they operate. The core business of commercial franchises isto use a recognized franchise to make profits by offering similarproducts and services to those of an established brand (Baxter102).On the other hand, the social franchise seeks to offer service andmake marginal profits so as to sustain their operations. Socialfranchises offer services at subsidized rates because the corepurpose is to offer services and not to make profits.
Mostcommercial franchises, such as McDonald’s also offer physicalinfrastructure for the franchisee. The commercial franchises oftenhave many infrastructures in terms of physical buildings and they maylease these premises to the franchisee or sell them. The servicesoften spare the franchisee the trouble of trying to find premises fortheir operations. However, most social franchises have difficultyfinding physical infrastructure. Usually, social franchises operateat community level, where there are no proper infrastructuresdeveloped by the communities. The franchisors often have nooperations in these areas and this makes it challenging for thefranchisee to find physical infrastructure (European SocialFranchising Network 1).
Socialfranchises operate at community level, where they may work insocially deprived areas because their core function is to uplift thelives of the societies they operate in. Social franchises exist incommunities where there is a social problem such as lack of ahospital to offer basic health care. The purpose is thus, to offerthis service. Commercial franchises seek to make profits and theyoperate in areas where their products or services are on demand (Alon127).The commercial franchises thus, position their businesses in terms ofdemand for their products.
Socialfranchises grow through close local networks. Social franchises mustidentify unique problems that are faced by the community and look forunique ways of solving the problems. The franchises grow throughclose local networks and their operations are localized (BeanstalkNewsletter 8).For example, if a trust exists in a community where the aim is toeradicate poverty through growing bananas, the trust establisheslocal networks that train the society on how to maximize onagriculture. On the other hand, commercial franchises areinternational. They also depend on creating local networks, but theyhave less community collaboration than social franchises. Theirpurpose is to offer goods and services that are suitable for thelocal community by being relevant and not through communitycollaboration.
Commercialfranchises focus on internal structures and modes of operation forexpansion. The franchises establish community needs and then organizetheir internal structures so as to maximize efficiency and profits.Social franchises focus on external structures. The franchisesprosper through strong networking with local communities. Thestructure and modes of operation of social franchises is influencedby the community and most of them employ the skills and services ofthe community in operation (European Network 1).The external forces are more important for social franchises than tocommercial franchises.
Inmost cases, social franchises do not necessarily offer identicalservices to those given by the franchisor. They only use thetrademark and business model similar to those offered by thefranchisor. This is because social franchises endeavor to solveunique problems in the society and they must, therefore, customizetheir services to meet the needs of the community they serve(European Network 1). In contrast, commercialfranchises often offer similar goods and services offered by thefranchisor. This is because the uniqueness of a franchisor is basedon the good and services offered and thus, the franchisee ought tostick to the reason customers recognize the brand.
Socialfranchises have two markets. The social franchises must meet theneeds of their beneficiaries, who are often the people who are thedirect beneficiaries of the services offered by the franchise and thecustomers of the goods and services that result from the need. Thefranchise must advertise itself to the beneficiaries as well as thecustomers. On the other hand, commercial franchises only meet theneeds of the customers. Commercial franchises exist by remainingrelevant to the needs of the customers only. Franchisees are meant tofocus on serving the needs of the customers efficiently, based on thebusiness model established by the franchisor (Baxter127).The customers are the most important entity in commercial franchiseswhile both the customers and beneficiaries of the services offeredare the important entities in social franchises.
Socialfranchises are flexible as opposed to commercial franchises. The mostimportant aspect of social franchises is that they have to meet theproblems of their target clients with maximum accuracy. It is,therefore, necessary to customize their services to fit the needs ofthe communities they serve. The core model of operation remainsstandard, but the services offered are often adjusted to meet uniqueneeds (BeanstalkNewsletter 18).However, commercial franchises are less flexible than socialfranchises. Commercial franchises often require the franchisees tomaintain the original business model with the most accuracy. Thecommercial franchises operate on the basis of uniformity becausetheir survival is not based on local networks. They thus maintain thebasic structure of the franchisor together with the fine details ofthe operation. Flexibility in commercial franchises is almost non-existent.
Socialfranchises engage in social activities by offering services directlyto the target community. Social franchises exist primarily to offersocial services and they exist in communities that require theirservices. For example, USAID exists in many countries across theworld to solve different social problems. Their mode of operationinvolves direct contact with the community. In contrast, commercialfranchises engage in social activities through corporate socialresponsibility activities. Commercial franchises maintain a goodrelationship with the community by offering corporate socialresponsibility services that are aimed at solving different problemsin the community (Alon96).Most commercial franchises do this in partnership with socialfranchises because commercial franchises have structures andmechanisms which help in solving social problems in the community.
Socialfranchises are helpful in helping non- governmental organizationsacquire funds from donors. The franchisor gives franchise licenses toorganizations that exist genuinely to solve social problems. It iseasier for the organizations to get funding if they are associatedwith franchises that are well- established in the sector of solvingsocial problems (BeanstalkNewsletter 20).For example, Oxfam is an established social franchise in offeringeconomic solutions in rural communities and thus, it is proffered bydonors in solving social problems. However, commercial franchises arehelpful in gaining market recognition quickly. Commercial franchisesthat are known for customer loyalty, often have to do lessadvertising to gain customers. Franchisees wishing to establishbusinesses offering similar products, therefore, take advantage ofthe established brand to do a little advertising. This is the reasonthe McDonald’s franchise is preferred by fast food franchisees.
Strengthsof social franchising
Socialfranchises make it easy to start organizations that are helpful tothe community. The franchises have a tried and tested model ofoperation, which can be replicated and improved in other areas. Thismakes it possible to start and operate social franchisessuccessfully, without concern about possible failure. Replicating analready existing model is an easier way of ensuring success thanstaring a new organization and finding a way around it individually(European Network 1). Existing models offerinsights into the possible pitfalls and there is a possibility ofpredicting the success or failure of the organization with a highdegree of accuracy.
Socialfranchises also have the benefit of transferring knowledge. Thefranchisors often offer training on the business model and modes ofoperation so as to facilitate success and understanding of the model.Training the employee in new franchises empowers them and gives thosenecessary skills and knowledge on how to overcome challenges andensure success (Baxter70).The employees have the technical skills that are important infacilitating the success and avoiding possible failure zones.Transferring knowledge makes it easy for new franchises to settledown to work as the employees already have the technical knowledge onhow to run activities.
Socialfranchises also increase the likelihood of the organization tosurvive by using a known brand name. People tend to associate withknown brands as they have been used and their expertise has beenproven. The familiarity of the community with the organizationfacilitates easy cooperation and formulation of networks, which isthe focal point of social franchises (European Network 1). Additionally, donors tend to cooperate with known brandsas they have credibility and a proven track record. The ability tosecure funds and support from the community increases the chances forsuccess and the likelihood of the franchise in offering qualityservices.
Socialfranchises also offer shared services that individual startups maynot afford due to limited funds. Existing brands have the financialand structural capabilities of training and marketing their services,which startups may not have. Shared services often spare startingfranchises the problem of financial constraints as the franchisoroffers the services as part of the agreement (European SocialFranchising Network 1). The shared services also come with technicalknowledge, which startups may not have and which may hinder theirsuccess rates.
Socialfranchises also have the strength of shared innovation and expertise.Social franchises implement changes across the board and innovationin one franchise is spread across all franchises. This enhancesgrowth as the franchises benefit from the innovation in one franchise(Ahlert& Hans 117).This is unlike in individual cases, where innovation is only kept inone organization. The shared innovation increases the chances forsurvival for the franchise as it improves its services to the societyand its business model becomes effective and efficient.
Socialfranchises also have the strength of stronger and more dynamicorganizations than individual startups. The franchises shareknowledge and skills as well as ways of improvement, whichstrengthens the networks and reduces chances of failure. The dynamicorganizations also have the capability to handle any challengesthrough strong structures that have been tested and improved overtime (Alon26).The franchisees benefit from the knowledge that has been improvedthrough testing and elimination of failure zones over time. Thefranchisee thus operates a strong organization, which increases itschances for survival.
Socialfranchises also have the potential for rapid growth. Socialfranchises often have limited finances and expertise, which makes itmore challenging to begin and operate than commercial franchises. Thefranchisee tries to offer quality social services while trying tostart up as a successful business at the same time. Social franchisemakes it easy to start an organization as it provides the start upwith a proven business model and thus, the franchisee invests littlein gaining technical knowledge (BeanstalkNewsletter 8).The franchisee can set up and operate a successful organization bytaking advantage of existing knowledge and expertise. The advantageof using existing knowledge provides an opportunity for rapid growthas the franchisee spends little time trying to understand thebusiness while offering services at the same time.
Whenstarting and operating a social franchise, it is possible toreplicate the strengths and avoid the weaknesses of an existingorganization. The franchisee studies the strengths and weakness ofthe franchisor and avoids weaknesses that may result in potentialfailure. The chances for survival are increased by this knowledge,which is helpful for organizations that are just starting up. Thefranchisee also can strengthen and improve the existing framework forsuccess (Ahlert& Hans 155).The franchisee has a model to replicate from and learns from itsmistakes. The franchisee learns from the existing framework and makesimprovements on the existing framework so as to increase the chancesfor success.
Socialfranchises also combine social and financial goals. The ability tocombine the two facilitates sustainability and success as thefranchise appeals to the community. The social services offered oftenendear the franchise to the community, which makes it likely tosucceed through networking. The franchise also achieves its financialgoals by having its services generate income, which sustains itsoperations (Baxter96).This successful combination makes the organization remain relevantand reduce chances of failure. The social services offered have abusiness angle, which facilitates success by making profits.
Socialfranchises also allow the franchisee to copy and customize thestructure of the franchise to his own context. The franchisee studiesan existing model and then comes up with ways of improving it so asto increase chances of success (European Network1). Most social franchises do not have the financial and structuralcapability to start their own organizations and learn from theirmistakes. The ability to learn a tried and tested model allows thefranchisee to study the model and customize it to fit his context,which increases chances for success.
Socialfranchises also make it possible to replicate the best practiceservices among large populations. The franchises have practices thatare proven to work and they have the core function of providingservices to the public. The excellent practices that have been madeby the franchisor can be replicated among small organizations andhelp in offering quality services to the community (Ahlert& Hans 150).The small organizations survive by replicating and improving thepractices offered by the franchisor, which promotes success rates.Additionally, the best practices can be copied by many smallorganizations, which make it possible to use a successful model overa large population.
Weaknessesof social franchises
Itis quite challenging to standardize the services offered to thecommunity, which makes it hard to enjoy economies of scale. Socialfranchises are based on solving unique problems in communities, indifferent areas. The unique problems mean that the organizations maynot have standard ways of operations, making it hard to enjoyeconomies of scale (Alon46).For example, a medical franchise may offer maternal health careservices in one area, but the franchisee my only be interested incatering for child immunization. The franchisees thus have differentneeds based on their areas of operation. This makes it hard for thefranchisor to obtain economies of scale for the entire franchise fromsuppliers.
Additionally,most franchisors offer little flexibility because their identitiesare based on offering specific services. The inability to exerciseflexibility may hinder the success of the franchisee as he may beunable to customize his services to cater better for the needs of thecommunity. Most franchisors prefer to have their standard model ofbusiness maintained so as to be able to implement changes andadjustments across the board (BeanstalkNewsletter 15).This inflexibility may be costly, where urgent changes are needed soas to improve the delivery of services.
Themonitoring process of franchises is also costly and may take a longtime, especially in large organizations. Social franchises existthrough close monitoring by the franchisor so as ensure that the bestpractices are maintained. However, this process may be expensive andit takes a long time to cover successfully. The franchisor thus, maynot be able to ensure that the standard practice is maintained andthe franchisee may take advantage of this to offer poor qualityservices at the expense of making profits (Baxter118).This can cause the deterioration of the franchise, making itcomplicated to be accepted by communities and donors.
Socialfranchises also have very little funds to start and operate. Thefranchises also make marginal profits, which may hinder the processof expansion of services (European Network 1). Thecore business of social franchises is to offer services and not tomake profits. The profits made are often little and they are usuallyused to sustain the organization. The franchise thus has a hard timeexpanding its services due to financial constraints. Donor funds arealso not easy to access and this means that the organizations cannotrely on donor funds to facilitate their operations. The franchisesthus, may not be able to sufficiently cover the needs of thecommunity served due to financial constraints.
Additionally,some franchisees may use the franchise brand for their own profitbenefits. The franchisees take advantage of the brand recognition tosolicit for funds from donors and then they do not use the fundsproperly to solve social problems. Such misuse of franchises mayaffect the franchise negatively as communities do not trust thefranchises, as well as donors. The mistrust leads to failure as theexistence of social franchises is based on the ability to formnetworks within communities and the ability to access donor funds(BeanstalkNewsletter 5).Lack of transparency thus, leads to a poor relationship betweendonors, community and the franchise, which may result in the death ofthe entire network.
Socialfranchises run the risk of drifting from the main mission of thefranchise. Social franchises exist due to their ability to giveservices that are according needs of the community. As the franchisesstruggle to customize their services meet the needs of the community,they may drift from the common mission of the franchise (Alon58).This can cause conflicts of purpose, which undermines the operationsof the franchise. A conflict of purpose can cause to an eventualbreak up, which is costly to the franchisee, who may not have theability to support himself.
Thedecision making process in social franchises is slow. Any majordecision that is concerned with the structure and model of theorganization requires collaborative efforts within the entirefranchise. The franchise is run through a protocol system and theindividual franchisee cannot implement major changes withoutconsultations. This slows down the process of implementing changesand can affect the organization in the long run. The protocol systemis costly as decisions which require urgent attention to improve onthe franchise are delayed, and may result in inadequacy, in theprocess of offering services to the community.
Thefranchisor’s satisfaction may also be in conflict with the socialgoals of the franchisee. The franchisee sets out to solve a specificproblem in society (European Network 1). However,the structure and model of the franchise may not be in sync with thegoals of the franchisee. This can create a conflict of purpose andhinder the social goals of the franchisee. The services offered thus,may not be adequate for the needs of the community. It is challengingfor the franchisee to balance the franchisor’s satisfaction and thecommunity’s needs.
Socialfranchises also work with small networks which may not besustainable. The networks are spread out over a wide area and theyoperate in small capacities. These are very costly to maintain asthey result in huge overheads and thus, lack sustainability. Thefranchisor offers some basic services such as training and management(Baxter88).These are costly to implement and can be expensive when the networkis small. It becomes unsustainable to operate such networks and thismay compromise on the quality of services offered.
Examplesof social franchising
MarieStopes is an international network of health care networks that aimat providing quality reproductive health services to women. Thefranchise is based in London but has branches across the world as itseeks to provide reproductive health care services globally. Thefranchise operates in the form of social franchises in differentcountries, each offering quality services in the county of operation.Marie Stopes endeavors to provide quality health care and it doesthis by customizing the needs of the community where it serves, inaddition to reproductive health care services. The basic serviceoffered is family planning, so as to reduce deaths due to unsafeabortions and reduce unplanned pregnancies.
Oxfaminternational is another franchise that has operations across theglobe. The franchise focuses on reducing poverty by empoweringcommunities to start and operate income- generating activities. Thefranchise works with the vulnerable communities as they are at riskof poverty and humanitarian crisis. The franchise works with groupsof people who are interested in eradicating poverty in theircommunities and offers franchises to such groups. The organizationhas an international network, which helps is to customize theservices offered in different communities, based on the skillsavailable within the community. The organization also carries outresearch on the poverty index across the world so as to organize therequirements of the community, based on the poverty index.
PSIinternational is a franchise which works with developing nations toimprove health care. The organization offers franchises toindividuals and organizations which wok with communities to providequality health care and reduce preventable deaths. The franchisesoperate in different countries, in developing nations as they aremost exposed to diseases and health care challenges. PSIinternational offers franchises based on the needs of the communityand the health care challenges within the community. The franchisesform networks which also act as research agents for the organization.The network is based on the community level and each franchise solvesa different health problem, based on the needs of the community.
Inconclusion, social franchises borrow heavily from commercialfranchises. Social franchises are business organizations whose maingoal is to provide social services to communities and make profits.The franchises are often operated by non- governmental organizationsand they are mainly concerned with offering social services. Theymust, however, make profits so as to sustain their operations. Thesocial franchises exist by building networks within communities so asto offer their services to many people in the society. Theiroperations are influenced by external factors.
Thesocial franchises are similar to commercial franchise in that theyalso aim at making profits. They also take on the business model ofthe franchisor and they operate on terms and conditions. The socialfranchises, just like commercial franchises, operate on protocols andthey cannot make independent decisions, especially those that mayaffect the brand. The decisions are made based on their applicabilityacross the network and they are implemented uniformly. However, thecore function of social franchises differs from that of commercialfranchises because its main aim is to provide services and not tomake profits. Social franchises also offer services that are uniqueto the community, while commercial franchises offer goods andservices that are unique to the business. Social franchises depend ondonor funds and they operate as small networks based in thecommunity.
Thestrengths of social franchises include cost savings, provision ofunique services, replicability, ability to cover a wide population,and facilitating economic development. Some of its weaknesses includeinability to practice economies of scale, conflict between thefranchisor’s expectations and the franchisee’s goal, themonitoring process can be challenging and costly, the decision-making process is slow, and the small networks are oftenunsustainable. Social franchising is gaining popularity as a way oftaking advantage of an established business model to facilitatesuccess. Some organizations like Oxfam, Marie Stopes, and PSIinternational are successfully using social franchising to reach awide population.
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