Social Franchising and Its Impact on Africa
“Nearly every problem has been solved by someone, somewhere. The frustration is that we can’t seem to replicate these solutions anywhere else,” says Bill Clinton. Social franchising is the application of commercial franchising methods to achieve socially beneficial results. And one of their core values is the sharing and replication of successful methods.
Even after years of aid through a variety of avenues, much of Africa is still in desperate need of improved access to health care and other infrastructure services. As a group of countries, Africa performs well below the rest of the world in Gross Domestic Product per capita. Sub-Saharan Africa levels are 3% of United States levels and 14% of overall World levels. GDP per capita decreased from 2015 to 2016. Africa can’t feed itself.
Africa has received substantial aid since 1960, increasing on a per-capita basis by a multiple of 20 by 2006. Yet poverty in East Africa doubled from 1981 to 2005. A key reason and a compelling limitation on improvement is African government instability, uncertainty and corruption. Africa is plagued by government theft of aid funds. The current message of the 2015 Addis Ababa Action Agenda is not to give Africa more money, but ensure their money is spent correctly to generate effective change.
David Cameron, a UK Prime Minister, suggested we stop focusing on the quantity of aid. Instead, long-term development only occurs if there is a “golden thread” of stable government, lack of corruption, human rights, the rule of law and transparent information. Economic incentives must be geared to allow the improvement of the state of the impoverished. And most importantly, it must allow the poor to “work” their way out of poverty, such has occurred in many parts of Asia which have experienced substantial economic improvement without significant aid.
In the end, the solution must be greater democracy. Publishing national budgets and holding governments accountable for how revenue is spent, are essential elements of democracy. There is a “democracy deficit.”
In 2007, the founder of Travel Smith started a social franchise offering lifesaving products to the poor. Living Goods uses a model like the “Avon Lady” to deliver required items door-to-door in local communities. Although not yet self-sustaining, that is the creator’s goal. And the longer he’s involved in the process, the fewer distinctions he sees between social and commercial franchising.
Another social franchise, Vision Spring, provides needed eyewear to the poorest of communities through health workers entrepreneurs. “We recover $7 from the marketplace for every $10 we spend,” says the founder. Another organization, Health Store foundation, aims to control the quality of medicine provided. They’ve found that 50% of sub-Saharan Africa drugs are made of chalk. They save lives through their quality efforts.
DKT, started in 1994 by Phil Harvey as a non-profit to promote family planning, uses all the techniques and infrastructure of commercial franchising, but doesn’t charge an upfront fee or royalties. Donors provide monies to update or build quality clinics and midwives are the most common franchisees. Each location must follow the basic franchise model, but has some flexibility to deal with the needs of their community. The franchisor drives business to the clinics through marketing and unique product offerings.
In 2006 Ron Bruder started his enterprise, Education for Employment, as a social franchise. “One hundred million. That’s the number of young people across the Middle East and North Africa who will need employment opportunities in the coming decades.” Despite early resistance from donors and partners, he has proven the model works. Job creation in local communities has been a key in the franchising process.
Marie Stopes International (MSI) program of family planning social franchising in Africa and Asia lists four key outputs: equity, quality, efficiency and access. They organize small, independent health care businesses into quality-assured networks, providing an opportunity to engage the private sector in improving access to family planning and other health services. In total, the services provided through this social franchise system resulted in an estimated 5 million fewer unintended pregnancies and 7,000 fewer maternal deaths.
There are stories of great successes and some failures in social franchising. Is it a model that can be used effectively to provide needed services and infrastructure to Africa? Absolutely. The franchise model provides a structure to allow consistent operations over a wide area. And it provides needed support to unsophisticated franchisees. The “local” ownership might be in a better position to deal with incompetent or corrupt governmental agencies.
Social franchising through the existing private sector model can rapidly scale-up access to high-quality services. Too much time and money are wasted reinventing the wheel. Coordinated investment into social franchising, backed by specialized expertise, has facilitated the delivery of social and financial returns and scalable social impact.
Social Franchising can’t overcome government disinterest and greed. As harsh as this may sound, aid organizations can’t waste funds that will be stolen or not used for the intended benefit. They must channel the funds to those areas best able and willing to use them effectively by following David Cameron’s “golden thread”.
Roger McCoy is a US Army Veteran, Certified Franchise Executive (CFE) and a Senior Franchise Business Consultant for Direct Energy. He has been involved in franchising since 2004 and is pursuing his PhD in Franchise Management. He has had articles published recently in franchising and trade publications and spoken on related PhD topics at a variety of conferences. This article is an abridged version of a PhD paper. He will be presenting his related findings at an international conference on “Africa at Development Crossroads” in Nairobi at the end of June, 2018. For further information please see rogermccoy.academia.edu.