Social Franchising: the devil is in the detail

Blog entry
Date: 
03.08.2015
Author: 
Skadi Falatik

Innovation tends to receive more attention than replication when it comes to debates around how to achieve meaningful social impact at scale. This interest in the new is understandable, but it must be remembered that social impact at scale is often achieved by leveraging established social enterprises with proven business models and experienced management teams.

We ran a workshop on “social franchising” last week as part of our work supporting Big Venture Challenge award winners. We were joined by Cathryn Hayes of the British Franchise Association; Lucy Campbell of FranchisingWorks; and Shaftesbury Partnership’s Chris Mould, who has overseen the scaling of the UK foodbank network to over 400 outlets in his role as Chair of The Trussell Trust. Three main themes emerged from the discussion:

1. Recruiting the right franchisees is vital

Our experts agreed that finding the right franchisees is extremely important and can take time. Lucy stressed that passion, enthusiasm and buying into the brand and values matters far more than specific experience, as this will increase the chance that franchisees won’t hurt the reputation of your brand. Additionally, Chris pointed out that having agreed on non-negotiables in advance of selecting franchisees for The Trussell Trust helped them to make sure they got the right people on board.

2. You need to develop (and regularly update) a robust operating manual

“Important but not an easy thing to do”, were Cathryn’s words when she spoke about the operating and training manual. To get this right, it is important that the business owner owns the process of writing everything down. This will also help you to constructively think about the way you’re conducting your business. It is also important to review and adjust this manual based on your learning and the feedback from the franchising process.

3. Replicate the 2nd pancake

The first iteration is not the one to replicate. Once you think you have a robust, replicable business model in place, start with a pilot first. This will be time-consuming, as you have to watch every step the franchisee makes, but will allow you to learn what works in practice.

Finally, Chris walked attendees through the 5 main questions they need to keep in mind when thinking about franchising:

1. Do you really want to grow?

2. Is your market large enough?

3. Do you have a proven business model?

4. Is your model manualisable and trainable?

5. Are your profit margins high enough so that they cover the costs of franchising and the franchisee can make a living?

If you can answer these and make sure your team commits to the time and effort involved in the journey, franchising could be the key to successfully growing your venture and its impact. The Shaftesbury Partnership will soon publish a longer paper on social franchising. Contact us at info@shaftesburypartnership.org to receive a copy.

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