Franchising isn't easy, especially in the social enterprise sector. So what do you need to have in place before you do it?
We all know what franchising is. We're surrounded by successful examples from fast-food restaurants to coffee shops. They work because companies give the franchisees a template to work from to establish a high-quality successful business quickly.
Social franchising operates on exactly the same principle: a proven social change project is turned into a 'franchise' and then quickly replicated. The difference here is that rather than creating profits for shareholders the aim is to create benefits to society. Even better, it encourages innovation because of the large number of motivated people tackling the same issues – and in some cases the power of the shared brand influences policy far beyond that of an individual organisation.
At the International Centre for Social Franchising, we work to help the most successful social impact projects replicate, starting off with our 10-part 'Ready to replicate?' test. Ask yourself the questions, give marks out of 10, and add up your overall score:
1. Is the social impact proven and evaluated?
It's critical to know that your project is creating good social value. If it's not, your time and scarce funding could be better spent elsewhere. In the worst cases you could be replicating something that actually creates harm – something I have unfortunately seen happen. How much proof is enough really depends on your project. Ideally, this would involve independent evaluation, but at the very least you need great case studies, stories, surveys, measure key outputs and benchmark against other similar projects where possible.
2. Has a sustainable business model been developed and demonstrated?
Ask yourself where the money for the project is going to come from in the long term. For social enterprise this could be as simple as through-trading; but in the case of charities you can get diseconomies of scale when you replicate – meaning that each replication just adds more ongoing cost. Trussell Trust Foodbanks are a great example of a charity model that has replicated sustainably.Their franchisees are churches who can continually raise the modest grant funding required to run and also make a contribution to the centre, the franchisor just needs to raise relatively small amounts of funding.
3. Can your project succeed in another place without its main assets?
The most common non-replicable asset is an individual, usually the founder, working 80 hours a week. If on replication, others don't have the same level of commitment the result is failure. It could also be something like a donated community kitchen on a local high street which keeps the restaurant costs down but is extremely unlikely to exist elsewhere.
4. Can your project flourish in other cultures and conditions?
The greater the difference in context, the greater the adaptation required and the more likely it is to present challenges. If you have a youth employment project in urban Accra and want to replicate in a rural area, it's likely to need significant adaptation; while village-to-village replication is much less likely to fail.
5. Are there processes, systems, training and procedures developed for delivery and quality?
If you are woolly on your systems for the key elements of your programme, I guarantee your 10 replications will find 11 ways of doing things, causing you great stress and dramatically increasing the chance of failure.
6. Does everyone from staff to board, and external stakeholders support replication?
Replicating your organisation is a significant undertaking and having all the right people on board is vital, whether that's internally with the chief executive or board, or externally with the local councils or the foundations you need to support your initial replication.
7. Are the legal arrangements in place?
No-one likes to get sued but it does happen, even to charities, so make sure you have good contracts in place – including financial audit and governance that make it less likely you'll be sued in the first place.
8. Are your brand and values clear and unambiguous?
If you're handing someone else your business, your intellectual property, your charity, and they don't understand its values, or have different values to you, that's where the biggest stress fractures occur. As research on marriage break-ups shows, if the values are incompatible from the outset, the relationship is doomed.
9. Does a significant market exist?
For charities, the need for services is likely to be huge, but many social enterprises struggle to scale because of insufficient market size.
10. Is there a supply of suitable franchisees willing and able to take on the franchise?
In the commercial sector this is pretty clear cut; individuals take on the franchise and make a significant personal financial investment. In the social sector your franchisee is more likely to be a community group, charity or church, and knowing that there are enough of these to scale is vital.
If you score between 75 and 100, you're ready or almost ready to replicate. Less than that, and you need some additional strengthening.
Posted by
Dan Berelowitz
Dan Berelowitz is chief executive of the International School for Social Franchising. Dan is one of the speakers at Oxford Jam – a three day event on social entrepreneurship running in parallel with the Skoll World Forum. His session 'Social Franchising The Future: A How-To Guide' takes place between 1pm and 2pm on Wednesday.
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