If you think about franchising then you probably imagine a business like a fast-food outlet that works by passing on experience and knowledge from one successful business to one that’s starting out.
Here’s how it normally works: 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 some other things. The franchisee also gets ongoing training and support. Acquiring a franchise might cost more money initially but it often reduces the risks and uncertainties somebody might have about starting their own business.
What is Social Franchising?
Social franchising works in a similar way to traditional franchising but the main 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.
Many social economies are rather small and so they only provide a small number of social benefits and jobs. These social economies can have a local impact but might not have a significant overall effect. This is where social franchising can step in and radically increase their impact.
Social franchisors can become big but still remain locally owned with social franchises who are members. So members cooperatively work together and become more effective and a better community.
Social Franchises – A Definition
- 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 been in the depth of a recession over the past few years, but social franchisors have, amazingly, experienced the opposite. All social franchisor Members of European Social Franchise Network (ESFN) are reporting increased turnover. They increased the combined turnover from £143,338,990 in 2011 to £262,283,926 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 quite incredible. The research also shows that social franchises have grown much faster than private businesses have.
A Social Franchising Success Story
More than 4 million people here in the UK are affected by food poverty, but still millions of tonnes of perfectly edible food gets thrown out every year. FoodCycle turns leftovers into nutritious meals for vulnerable people. It is currently expanding and decided to do that by adopting a social franchising approach that it developed together with the International Centre for Social Franchising.
Since implementing a social franchising model FoodCycle has opened five new hubs. Each one is run by a local partner organisation that already had an established community presence. Because of this presence they were able to easily raise funds from corporates, trusts and local authorities prior to setting up. Being a part of the FoodCycle network has allowed them to attract volunteers, access surplus food and engage the local community. FoodCycle gives its social franchises access to its brand and marketing, and holds an annual training programme. There is also ongoing support and evaluation to ensure that hubs remain sustainable, of high quality and deliver real social impact.
When it’s properly used, social franchising can really drive social change at a rate that simply wasn’t possible until now. It’s our responsibility to ensure that this continues to happen. There’s lots of excitement around social franchising and its bright future in the UK.