By MSA Worldwide
MSA’s Role in Social Franchising
MSA’s focus on social franchising extends back more than twenty-five years, when we led the development of Community Development Corporation’s acquiring commercial franchises in the emerging “inner city” markets in the United States. Through his work as a member of the board and executive committee of the HealthStore Foundation, Child and Family Welfare (CFW) Clinics (Kenya), and One Family Health (Rwanda), and through his role as Chief Concept Officer, Michael Seid, Managing Director of MSA Worldwide, has played a critical role in social franchising’s understanding of the standards and practices found in commercial franchising and how they can be adapted to providing critical services to the poor. Extending into its commercial practice, MSA has supported NGOs, donors, government agencies, and social franchisors in understanding the dynamics of franchising, and is developing for one of its European clients a network of social franchise birthing centers in Ghana.
With the support of the IFA’s Board of Directors, Michael established and chaired the IFA’s Social Sector Task Force; Marla Rosner, Senior Learning & Development Consultant with MSA Worldwide, currently chairs the task force. Focused primarily on the needs in the international community, the task force is comprised of IFA members and participants outside of the association, and provides a mentoring program to promote and support cross-sector learning between the social and commercial franchising communities. Due to a growing need domestically, the task force now includes in its mission supporting markets within the United States.
What is Social Franchising?
The IFA’s Social Sector Task Force defines Social Franchising as the application of commercial franchising methods and concepts to achieve socially beneficial ends. Social franchising is used to increase access to products and services across a range of socially oriented industries (e.g., education, health, agriculture, water, sanitation, clean energy), with its target market being underserved populations in low, medium, and high-income countries around the globe. Providing access to socially beneficial products and services delivered to high brand standards, and also enabling local entrepreneurs to lift themselves out of poverty and to create jobs in their community, is the goal of all social franchisors.
MSA Worldwide believes that enterprising people at the base of the pyramid (in both developed and developing countries) can have a world-changing impact if they are connected with the right resources. Franchising provides a bridge to overcome the resource gap, providing local business owners with a structured and supported system that can provide them with the necessary training, ongoing support, and access to capital required for them to succeed. Because of the professional rigor built into any well-designed and managed franchise system, donors to social franchisors have the capabilities to monitor the impact of their investments on a consumer-by-consumer basis, something critically lacking in traditional NGO approaches.
What is the Market Potential for Social Franchising?
It is a hard reality that in 2022, childbirth and diseases long conquered or controlled in the developed world are still the number one causes of death for women and children globally. Franchising has been adapted successfully to hundreds of industries in the commercial sector, and its potential for solving societal problems in emerging markets is still in its infancy.
The economy at the Base of the Pyramid represents $5 trillion in purchasing power worldwide[1], translating into an immense opportunity for local entrepreneurs and communities. In 2014 the World Bank anticipated that over the next five years, economic growth in emerging markets will more than double the growth in developed economies. For donor organizations, including government agencies, the ability to measure the performance of the enterprises they support at the consumer level, as done in commercial franchising, will extend the reach of their financial resources and allow for transformational change. The ability to adapt commercial franchising strategies to scale a variety of social enterprises in health, education, water, sanitation, agriculture, and clean energy will have a transformational impact on the health, well-being and economies in the impacted markets.
What are the Challenges to Realizing the Potential of Social Franchising?
Even though much has been written about social franchising, there are surprisingly few examples of social franchisors that have been able to demonstrate the desired results. The fault lies not with the franchise business model itself, but rather with the social sector’s limited experience with and understanding of the franchise business model and the development of effective, sustainable, and well-managed social franchise systems. The goal for MSA Worldwide, in extending its practice into the social sector, is to bridge the gap of understanding about how commercial franchising techniques can be applied and, by doing so, facilitate the growth of quality social franchising enterprises.
[1] The World Resources institute and the International Finance Corporation; The Next 4 Billion: Market Size and Business Strategy at the Base of the Pyramid; 2007
Do you have further questions about social sector franchising?
MSA can provide expert guidance on how the model of social franchising can efficiently bring needed services to under-served populations.