10. Microfranchising
- The systematization and
replication of
microenterprises
- A business model that gives
individuals the tools they
need to run successful
businesses
-
Systematized business
Training
Access to products
Strong branding
11. How it works
Microfranchise system
- The microfranchisor provides a
“turn-key” business for a
microfranchisee to operate
Microfranchisor
Provide know-how
Conduct advertising
- The microfranchises is a set of
systems and best practices, that
if followed, will help the
microfranchisee to be successful
- This is key to the business being
easy enough for nonentrepreneurial individuals to be
successful
Design a respected brand
Negotiate contracts with suppliers
Protect licensed franchise territory
Establish effective operational manual
Microfranchisee
14. Franchising
Computer / Internet
Manufacturing
Retail
Advertising
Automotive
“In the United States alone, franchising accounts
for more than $1 trillion in sales annually and
employs more than 8 million people, or 1 in
every 7 adults.”
Financial Services
Not just:
Fast food
Service
Fitness
Construction
Lodging
Real Estate
Maintenance
Business Services
Restaurants
15. Microfranchise Example
- Leading manufacturer of Ice Cream,
Yogurt and Juice, founded in 1962 in
Ghana, later expanded into Togo, Benin,
Liberia, Mali, Burkina Faso and Nigeria
- 10,000 young men operating
microfranchise
- $72 Million Revenue 2009
- $20 Million Profit 2009
- 95% retention of microfranchisees
- Microfranchisees earning double their
counterparts
17. Three year longitudinal study
• Risk was
reduced for the
microfranchisee
• Microfranchisees
earned more
money
• Retention rates
were higher
18. Microfranchising and Microcredit
Microcredit
Microfranchising
• Provide access to capital for
microfranchisee
• Provide access to communities
– Trust
– Research
• Provide turn-key business
opportunity
• Provide proven business model
• Provide links to formal markets
Results
1. Mitigated loan risk for MFI
2. Opportunity for MFI to move up-market
with mitigated risk
3. Mitigated start-up risk for
microfranchisee
4. Microfranchisor has access to capital
needed to scale
5. Microfranchisor has access to potential
recruits
6. Microfranchisor has access to trust built
by MFIs in challenging markets
19. Meet Fati John
When we met her, she:
• Earned $2/day
• Was illiterate
• Had 4 children unable to go to school
• Worked 16 hour days
Becoming a microfranchisee changed
her life.
• Today she: Earns $20+/day selling
variety of products in rural villages
• Is paying to learn English
• Can afford to send her children to
school
• Works 12 hour days
• Is self-confident and self-reliant
