Social franchising explained

Social franchising is the application of commercial franchising concepts to achieve socially beneficial ends, rather than profit.^[1]

Overview

Social franchising is the application of the principles of commercial franchising to promote social benefit rather than private profit.

In the first sense, it refers to a contractual relationship wherein an independent coordinating organization (usually a non-governmental organization, but occasionally a governmental body or private company^[2]) offers individual independent operators the ability to join into a franchise network for the provision of selected services over a specified area in accordance with an overall blueprint devised by the franchisor.^[3] Once joining the network, operators are given the right to employ previously tested incentives including: professional training, use of brands or brand advertisements, subsidized or proprietary supplies and equipment, support services, and access to professional advice.^[4] Members also gain beneficial spin-off effects such as increased consumer volume and improved reputation due to brand affiliation. Franchisees must adhere to a range of requirements including: providing socially beneficial services, meeting quality and pricing standards, undergoing mandatory education on provision of services, subjecting outlets to quality assurance mechanisms, reporting service and sales statistics, and occasionally, paying fixed or profit-share fees.^[5] Social franchises have been used for primary health services, pharmaceutical sales of essential drugs, HIV testing and counseling, and reproductive health services in the developing world.

A second application of social franchising is as a means of enabling social enterprises and the social economy to create more employment for disadvantaged people and achieve social aims. This is done principally by enabling joint working and knowledge sharing and transfer. The European Social Franchising Network has identified over 60 social franchises of this type in Europe, which employ over 13,000 people and more recently in 2012 The International Centre for Social Franchising identified 140.^[6] The largest of these is De Kringwinkel in Flanders employing 5,000 people. Others, like the Le Mat hotel and tourism social franchise or the School for Social Entrepreneurs operate in more than one country. Social franchising provides an opportunity to rapidly grow the sector to the benefit of disadvantaged people and society more generally.

Support Organisations

The international Centre for Social Franchising (ICSF) was founded to help replicate proven social ventures to scale. They have a number of useful resources and have published papers such as Investing in Social Franchising^[6] which looks at the viability of investment into franchised social enterprise in the UK and Social Franchising: Innovation and the Power of Old Ideas ^[7] which is a comparison between McDonald's and the social franchise Foodbank.

The ICSF has recently (2015) developed and launched a social franchising toolkit with NESTA, Bertelsmann Foundation, London School of Economics and others to help the best social ideas develop as a franchise. The group recently carried out research into replicable health care models with significant social benefit^[8] with GlaxoSmithKline the pharmaceutical company, published in May 2013.

Social franchising for health services

There are a number of social franchising set ups in the area of health care and social mobility. According to the components of Human Development Index, "Health" and "Living Standards" are the two major components of HDI (Human Development Index). Social franchising for essential health services is an emerging technique used by governments and aid-donors in developing countries where a substantial percentage of health services are provided by private sector (including non-profit NGOs and private for-profit) to improve access, equity, effectiveness, and quality. Clinical franchising often takes the form of a fractional model where franchised services are added to an existing medical practice, but also can exist as a stand-alone practice wherein the site exclusively provides franchise supported services or commodities. Social franchising has been used to deliver a wide range of services including DOTS tuberculosis treatment,^[9] sexual transmitted infection management,^{[10] [11]} primary care, and HIV / AIDS treatment.^{[12] [13]}

Strengths and weaknesses of social franchising

Strengths

By organizing small independent providers into larger units, social franchises can yield returns to scale in investment in physical capital, supply chains, advertising, and worker training and supervision. Additionally, social franchises can offer the ability to: faster scale up programs, decrease transaction costs, provide uniform services to a broad market, collectively negotiate financial reimbursement mechanisms, and replicate best practice services among a large group. Franchisees can also cross-subsidize less profitable services with the more profitable ones supported by the franchisor. The use of brand advertising makes social franchising compatible with social marketing.^[14] In addition, social franchising for health services allows an expansion of services because of cross-subsidization, addition of less-profitable services if fractionally franchised, and access to costly medicines if subsidized by the coordinating organization.

Weaknesses

Several inherent logistical and economic weaknesses are present within the social franchising model. These include the difficulty in standardizing medical care among participants, the need for networks to be sufficiently large to attain an economy of scale, the cost and challenge of regulatory oversight of outlets, and the need to base organizational decisions on the population demand which may not maximize quality or minimize cost. There also exists the possibility of “tragedy of the commons” wherein franchisees provide low quality, low cost due to incomplete monitoring. Social franchising for health services runs the risk of overly procedural, “cookie cutter” medical provision, overtreatment of disease conditions, and the possibility of fraud if oversight is not present.

Social Franchise Enterprises

The Social Franchise Enterprise is a type of Social initiative directed to achieve development goals through private ventures that provide goods and services to unserved markets, at a viable price. The Social Franchise enterprise creates self sustainable economic activity for the franchisees by using the franchise model to provide them with Capacity Building (know-how & training), Access to Market (bulk procurement of standard supplies, network clients, brand) and Access to Credit (benchmarking leading to Bankability). Franchisees then become capable to supply a given population with much needed goods or services.

By maintaining the transaction element, the Social Franchise Enterprise generates the revenue to both the Franchisees and to the Social Franchiser, who becomes self sustainable and can further extend its footprint and further supply unserved markets, enforce monitoring and continue to provide added value services to the Franchisees network. Telephone/communication kiosks have been studied by the WB since 1995. Currently, rural electrification and rural mobile providers represent attractive fields to develop Social Franchise Enterprises that create economic activity and provide communities with electricity and access to communications.^[15]

History of Social Franchise Programs

The first significant implementation of social franchising was conducted in 1995 by the Greenstar franchise in Pakistan. Since its inception, Greenstar has trained over 24,000 providers, and provides family planning, sexual and reproductive health services, maternal and child health services, and tuberculosis diagnosis and treatment through over 80,000 retail outlets.^[16] Since then, over 35 additional social franchise programs have arisen, with much of the increase in the number and size of social franchises occurring in the last four years. Franchises have additionally expanded their services from mostly family planning to testing and treatment of malaria, tuberculosis, and HIV / AIDS.^[17]

Existing Clinical Social Franchises

Franchise Name	Country	Coordinating Organization	Date Founded	Number of Clinics	Family Planning	HIV	Sexual and Reproductive Health	Maternal and Child Health	Tuberculosis	Malaria	Other
AMUA	Kenya	Marie Stopes International	2004	144
Andalan	Indonesia	DKT International	2001	5,000
ARV Care	South Africa	BroadReach	2002	4500
Biruh Tesfa	Ethiopia	Pathfinder International	2000	130
Blue Star (Bangladesh)	Bangladesh	Social Marketing Company	1998	3600
BlueStar (Ethiopia)	Ethiopia	Marie Stopes International	2007	107
BlueStar (Ghana)	Ghana	Marie Stopes International	2008	102
BlueStar (Malawi)	Malawi	Marie Stopes International	2008	59
BlueStar (Philippines)	Philippines	Marie Stopes International	2007	66
BlueStar (Sierra Leone)	Sierra Leone	Marie Stopes International	2008	70
BlueStar (Vietnam)	Vietnam	Marie Stopes International	2007	32
Confiance	Democratic Republic of the Congo	Population Services International	2004	78
CFWshops Kenya	Kenya	Child and Family Wellness Shops CFW	2000	67
CFWshops Rwanda	Rwanda	Child and Family Wellness Shops CFW	2008	2
DiMPA Network	India	PSP-One	1998	1150
FriendlyCare (Philippines)	Philippines	FriendlyCare	1999	6
Greenstar	Pakistan	Population Services International	1995	8000
Gold Star	Kenya	Family Health International	2006	279
Merrygold Health	India	Hindustan Latex FP Trust	2007
Intimo	Mozambique	DKT International	2011	9
Key Clinics	India	Population Services International	2004	701
K-Met (Kenya)	Kenya	K-MET	1995	200
Mexico (Community Doctors Program	Mexico	Mexfam	1986	300
New Start (South Africa)	South Africa	Population Services International	2007	11
New Start (Lesotho)	Lesotho	Population Services International	2004	6
New Start (Swaziland)	Swaziland	Population Services International	2003	16
New Start (Zambia)	Zambia	Population Services International	2002	8
New Start (Zimbabwe)	Zimbabwe	Population Services International	1999	41
POPSHOPS	Philippines	DKT International	2005	300
Operation Light House	India	Population Services International	2002	12
ProFam (Benin)	Benin	Population Services International	2004	30
ProFam (Cameroon)	Cameroon	Population Services International	2004	25
ProFam (Mali)	Mali	Population Services International	2005	33
PSI Togo	Togo	Population Services International	2002	13
PSI Uganda	Uganda	Population Services International	2007	2
RedPlan Salud	Peru	INPPARES	2002	1668
Sahath Al-om (MotherHealth)	Sudan	DKT International	2011	12
Sangini	Nepal	Nepal CRS Company	1994	2928
SkyHealth / SkyCare Centres	India	World Health Partners	2008
Smiling Sun	Bangladesh	Chemonics International	2008	40
Society for Family Health	Nigeria	Population Services International	2006
Sun Quality Health (Myanmar)	Myanmar	Population Services International	2001	846
Sun Quality Health (Cambodia)	Cambodia	Population Services International	2002	164
Surya Clinics	India	Janani/DKT International	2000	63
Top Reseau	Madagascar	Population Services International	2001	155
Well-Family Midwife Clinics	Philippines	Well-Family Midwife Clinic	1997	100
Vitaloc Station	Hong Kong	Vitaloc Station	2012	3

External links

• The International Centre for Social Franchising
• Private Healthcare in the Developing Countries section on Social Franchising
• Why Vitaloc Station targets health and social mobility issues
• Human Development Index

References

1. Montagu, D.. 2002. Franchising of Health Services in Developing Countries. PDF. Health Policy and Planning. 17. 2. 121–130. 2008-03-06. 10.1093/heapol/17.2.121. 12000772. free.
2. Bishai, D. . 2008 . Social Franchising to Improve Quality and Access in Private Health Care in Developing Countries . Harvard Health Policy Review . 9 . 1 . 184–197 . 2008-03-06 . dead . https://web.archive.org/web/20111020075338/http://www.hcs.harvard.edu/~hhpr/currentissue/184-197%20Health%20Highlights_Bishai_edited.pdf . 2011-10-20.
3. Stanworth, J.. 1995. Franchising as a source of technology transfer to developing economies.. Special Studies Series, No 7 ed. I.F.R. Center. Vol 7. Westminster: University of Westminster Press. etal.
4. Koehlmoos, T.. Koehlmoos. 2008. Tracey Perez. The effect of social franchising on access to and quality of health services in low- and middle-income countries. Cochrane Database of Systematic Reviews. CD007136.. 1. 10.1002/14651858.CD007136.pub2. 19160323. CD007136. etal. 6791299.
5. 10665/269380. Prata, N.. 2005. Private Sector, Human Resources and Health Franchising in Africa. Bulletin of the World Health Organization. 83. 274–279. 15868018. Montagu. D. Jefferys. E. 4. 2626208.
6. Berelowitz, D . Richardson, M . amp . 2012. Investing in Social Franchising.
7. Berelowitz, D. 2012. Social Franchising: Innovation and the Power of Old Ideas.
8. Berelowitz, D. 2013. Identifying Replicable Healthcare Delivery: Models with Significant Social Benefit.
9. Lonnroth, K.. 2007. Social franchising of TB care through private GPs in Myanmar: an assessment of treatment results, access, equity and financial protection.. Health Policy and Planning. 22. 3. 156–166. 2008-03-06. 10.1093/heapol/czm007. 17434870. etal. free.
10. Peters, D.. 2004. Strategies for engaging the private sector in sexual and reproductive health: how effective are they?. Health Policy and Planning. 19. Supplement 1. i5–i21. 2008-03-06. 10.1093/heapol/czh041. 15452011. etal. free.
11. World Health Organization and USAID.. 2007. Public policy and franchising reproductive health: current evidence and future directions. Guidance from a technical consultation meeting.. etal.
12. 10.1590/S0042-96862006001100010. Perrot, J.. 2006. Different approaches to contracting in health systems.. Bulletin of the World Health Organization. 84. 11. 859–866. 31 January 2024. 2008-03-06. 17143459. 2627549. etal.
13. Montagu, D.. 2003. Innovations in access to TB and HIV/AIDS care in sub-Saharan Africa: dynamic engagement of the private sector.. Applied Health Economics and Health Policy. 2. 4. 175–180. 2008-03-06. Elzinga . 15119536.
14. http://ps4h.org/social_franchising.html Private Healthcare in Developing Countries
15. Hidalgo E, A. 2012. The Franchise as a Development Tool - The Social Franchise Enterprise.
16. Web site: Greenstar Social Marketing: Social Franchising Private Health Services . 2009-01-25 . 2009-03-29.
17. Montagu, D. . the Global Health Group . amp . 2009 . Clinical Social Franchising 2009: Annual description of country programs worldwide . dead . https://web.archive.org/web/20110720082300/http://www.globalhealthsciences.ucsf.edu/pdf/SocialFranchisingCompendium.pdf . 2011-07-20 .