The final motivation of the franchises we all know is to make a profit. In contrast, the motivation of social franchises is to help society, for example, increase the employment rate of a more disadvantaged group. Profits are still a component of success, but in the case of this type of franchises, it is the means to achieve the end and not the final result.
What are social franchises?
Social franchises are created by people who recognize a problem in society and strive to solve it using entrepreneurial principles that are part of traditional franchises to create, organize and manage a project.
Officially, the Department of Social Work of the International Franchise Association (IFA) defines social franchising as the application of methods and concepts of commercial franchising for beneficial purposes for society. The key features of the social franchise are, according to the European Network of Social Franchises (ESFN):
- An independent company that replicates a social business model (the social franchisor)
- At least one independent social franchise that successfully replicates the business model of the social franchisor
- A common brand under which social franchisees operate
- An exchange of knowledge between members
- An agreement that regulates the rights and obligations to ensure the sustainability of the franchise as a system
In addition, the ESFN stipulates that both the franchisor and its franchisees must be social enterprises (businesses that have a commercial purpose and have a social purpose) and that share the same values. The amount of interconnectivity may vary between the social franchisor and its franchisees. Some have a very well defined business format while others are more flexible.
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Like all franchises, there are challenges that must be overcome to achieve success. However, overcoming these challenges, social franchises can obtain great benefits such as:
- Faster reactions to the needs of the area
- Put programs into operation more quickly in new places.
- Collective bargaining capacity
- Improved replication of good practices.
- An established brand that helps attract valuable and talented partners.
In addition, as we have said before, ESFN is one of the largest organizations that is making social franchises known. Founded by members of the European Union, the association is limited to exclusively social franchises and does not have to pay registration fees. In addition, there is the International Social Franchise Center (ICSF). Founded in 2011 by Dan Berelowitz and Michael Norton, ICSF wants to use the experience in charities of its members to achieve efficiency in the efforts for social changes. The organization is based in London and has two offices in the United States (San Francisco) and Australia (Victoria).
Social Franchising in Growth
Social franchises are well known in Europe, the Middle East, Africa and Asia, but it seems they are having trouble entering the United States, where there are around 100, according to the magazine Franchising World.
In order to take advantage of the principles of franchising, a non-profit organization or social enterprise must have a solid foundation. These recommendations for potential social franchisors have been taken from the report ” Non-Profit Franchises: A Strategic Approach,” conducted by Community Wealth Ventures, a consultancy in Washington DC, and the IFA Education Foundation:
- Find the right partners
- Do not compromise the concept
- Promote the relationship
- Monitoring and control of the operation
Social Franchises in Action
As you can imagine, when social franchises are used, these are charitable or health environments. Other sectors in which there are social franchises are the employment of disabled people, renewable energy, recycling, cleaning, cycling, adaptation for ex-convicts, and others.
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Consultants such as Enfoke Franquicias develop social franchises from different sectors, helping people with an adequate profile to access the labor market with the best guarantees of success.