SOCIAL FRANCHISING
Today social franchising means taking commercial franchising practices and using them in an NGO setting to help those less fortunate Michael Seid, International Franchise Association’s Social Sector Task Force
Another key difference from commercial franchises is that social franchisees aren’t always necessarily people. “Sometimes local organisations that have their own local identity become franchisees,” says Nick Temple, deputy CEO at Social Enterprise UK. He explains that this has to do with the overall collaborative nature of social enterprises in general. “If there’s a great organisation in Liverpool that’s working in the same field, then most of us would wonder if we could work together instead of opening a competing brand down the street,” he says. That being said, the qualities of
a good social franchisee are not particularly different from the ones you find in more commercial franchises. “They have to have the right mix of being entrepreneurial and able to work within the framework at the same time,” says Temple. In other words, the people within the network should be bursting with ideas on how to take on the local market but still not stray too much from the model. “The only difference really is that franchisees have to be very aligned with your social mission,” says Temple. “If you’ve got someone with a different set of values then it just won’t work.” But despite having gained in
popularity over the past decade, social franchising is still reasonably small on these shores. In a report from 2012, the ICFS estimated that there were less than 100 social franchises in the UK. “It may be a few more out there now but I still think that we are in the tens rather than in the hundreds,” says Temple. Comparatively, there were 930 franchisors in the UK in 2013, according to the bfa. A part of the reason for the low number is that social franchises still don’t enjoy the help that their peers in the commercial sector do. “You don’t see the same supportive infrastructure around social franchises as commercial franchises,” says Temple. Thanks to its long successful history, commercial franchising is seen as a safe bet for banks to invest in. But because social franchising is still in its infancy, it means that many of the ventures in the social sector may find it challenging to raise funds. According to Social Enterprise UK, most social franchises are either funded by trusts and foundations or from the organisation’s own reserves. And given that the European Social Franchising Network estimates that the average cost of building a social franchise is around €150,000, it’s hardly surprising that few organisations have established sustainable social networks. While there are initiatives like the ICSF’s new social-franchise accelerator and several programmes out there aimed at helping non-profits build their networks, they are – much like the sector itself – still in their early days. “Social franchising has immense potential but we need the infrastructure and funding,” says Temple. “There have been a few bits and bobs ticking away and being developed but there’s nothing like what we could’ve hoped for. So there’s room for improvement.” Nevertheless, it’s encouraging to see that the transformative power of franchising is being adopted by social enterprises and non-profits. And given the success of commercial franchises and their impressive ability to scale, we’re willing to bet that social franchising is soon going to be a force to be reckoned with.
42 elitefranchise | JULY 2017
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