Franchising is first and foremost a way of transferring knowledge and experience from one successfully operating business venture to a new company. The franchisor gives the franchisee the right – but also the obligation – to operate a business according to the franchisor’s concept.
The franchisee, for a fee, may use the franchisor’s name and trademark, know-how, business methods and techniques, way of working and other rights. Upon becoming established, and during further operations, the venture receives support and training, and (not least) the further development of the concept.
The Advantages of Franchising
– Without extensive experience, one can
start a business venture.
– One’s own marketing is supported through
being part of a larger whole.
– The risks for the entrepreneur, and for
the financier, are considerably lower.
The likelihood of bankruptcy among new
franchise ventures is only one-sixth of
the rate among new ventures in general.
Social franchising means using and developing the franchising method to achieve social goals. It is about spreading experience from successful social enterprises so that more people become employed. And that these companies apply democracy in such a way that the potential of all employees is developed. Social franchising also builds a community by stimulating contacts among employees in different companies and efforts toward common goals.
In social franchising, there is a founder, just like in any franchise. The starting point for the franchisor is to spread its ideas, share its experiences, and build a community. The social goals are fundamental, and often include contributing to the creation of more jobs. In this form of franchising, exchange and learning through contacts with those who started earlier are important for the entrepreneurs.
The Form Varies
The founder builds up a franchise system and becomes a franchisor. The forms vary among different systems. They can be cooperatives when this is appropriate, but the franchisor always enters into an agreement with the franchisee that regulates rights and obligations. Through involvement, knowledge, and fees, the franchisee contributes to the development of the business concept.
By defining the keys to success and documenting them in manuals, and by developing training courses based on them, a group of entrepreneurs can gain access to knowledge and experience.
In social franchising, an important aspect is training as a source of support for entrepreneurs. Training, forms of management and routines are designed so they empower the employees. As a part of every company’s founding, everyone is involved in the design of the organization.
More Social Enterprises Can Be Started
Starting a social enterprise is usually difficult. The entrepreneurs have often been without a foothold in the labour market, with all that goes along with that. Knowledge and networks for operating a company may not be the best in all cases. Starting and operating a company under these premises is very difficult.
Through social franchising, to put it simply, more social enterprises will be able to start. It provides a support structure for social enterprises.
Handles the Competition Better
By cooperating in a franchise organization, competitiveness is improved. Joint development and quality efforts offer better prospects. Even the social enterprise must survive the ever-faster change in its environment!
Read moore about social franchising in:
Expanding Values; A guide to Social Franchising
in the Social Enterprise sector
European Social Franchising Network
in SIPS Conference book.
– SIPS Conference book