Traditional franchising works for industries like fast-food outlets and coffee shops by passing on knowledge and experience from one successful business to another. The franchiser gives the new franchise owner the right and obligation to run a new business in line with the franchiser’s original concept.
After paying a start-up fee the franchise owner can use the franchiser’s name and trademark, business model and method as well as various other things. They also receive ongoing training and support. Acquiring a franchise might cost more money initially but it often reduces the risks and uncertainties about starting up a business.
What is Social Franchising?
Social franchising operates along similar lines to traditional franchising but the crucial difference here is that a social franchise is usually set up to get people cooperating together and sharing ideas first and foremost, as opposed to traditional franchising that is set up with the primary goal of maximising profits.
The social franchise is driven by a social goal, which could be anything from tackling environmental issues to employing those with a substance misuse issue. While its primary goal is a social one, it is also a properly functioning business that is profitable.
Lots of social economies are fairly small and so they only provide a small number of social benefits and jobs. These social economies can have a local impact but not really have a significant overall effect. This is where social franchising can step in. Social franchisors can become big but still remain locally owned with social franchises who are members. Thus members collectively work together and become more effective and a better community.
Social Franchises – A Definition
Social Franchises
- Have a social goal but they are also a business that makes profits
- Need minimum one social franchise owner
- Have a common brand under which all social franchise owners operate
- Exchange knowledge between members
Social Franchises in the News
Europe has experienced significant economic decline over the past number of years, but social franchisors have done the opposite. All social franchisor Members of European Social Franchise Network (ESFN) are reporting increased turnover.
Social franchises have increased their combined turnover from €199,615,600 in 2011 to €365,259,747 last year. Of the original 18 Members they increased their percentage turnover by 32. Members then now have 3.3 times more staff which, at a time of economic problems in so many European countries, is incredible.
The research also shows that, amazingly, social franchises have grown much faster than private businesses have.
A Social Franchising Success Story
FareShare was set up by the charity Crisis and Sainsbury’s back in 1994 to counteract growing food poverty among the homeless using a social franchise model. It had become clear that the problem affected many sectors of society and FareShare saves good food destined for waste and send it to charities and community groups who transform it into nutritious meals for vulnerable people. In 2004 it became an independent charity.
Now they help various groups, ranging from refugees and the elderly to domestic abuse victims and those with substance abuse problems. Their food is distributed to a range of venues from breakfast clubs for disadvantaged children, to domestic violence refuges, community cafés and homeless hostels. They have 12 regional depots, run by partner organisations that act as social franchises and distribute the food to 500 charitable groups, helping a whopping 25,000 vulnerable people each day.
The Future
Social franchising, when it’s effectively used, can be critical to driving social change at a pace that just wasn’t possible before now. It is our responsibility to ensure that this happens and so there’s a lot of excitement around social franchising and its bright future right now.