Michael Seid

Like any other franchise, social franchises need funding to get off the ground. Social franchises use the following sources of capital to help them fulfill their missions: Fees for goods and/or services Individual donations and major gifts Bequests Corporate contributions Foundation grants Diaspora funding Government grants and contracts Debt and equity capital (usually via impact investors) Interest from investments Loans/program-related investments (PRIs) Tax revenue and government grants Membership dues and fees Different and sometimes blended funding vehicles are used to support different growth drivers at each stage of a social franchise’s development.

For social franchises to be part of the solution, they need to be scalable, affordable, effective, sustainable, and accessible to the poor. The most common methods employed by NGOs in delivering services to the extreme poor too often fall short. You should remember that given the enormous population at the BOP, even with extreme poverty, it should be a significant consumer market for companies to sell their products to.

Many of the resources available to traditional NGOs are also available to social franchise systems. Take a look to see a few of the options. Government funding agencies for global development Following are the top government agencies involved in providing global aid, grants, and assistance. On each country/agency site will be information on the type of organization, development budget, focus on target countries, contact information, and more: Agence Francaise de Developpement Australian Agency for International Development Austrian Development Agency Belgium Foreign Affairs, Foreign Trade and Development Cooperation Canadian International Development Agency Danish Ministry of Foreign Affairs Dutch Ministry of Foreign Affairs Finnish Ministry for Foreign Affairs Gesellschaft für Internationale Zusammenarbeit Greek Ministry of Foreign Affairs Irish Department of Foreign Affairs/Irish Aid Italian Ministry of Foreign Affairs’ Directorate General for Development Cooperation Japan International Cooperation Agency Korea International Cooperation Agency Kreditanstalt für Wiederaufbau Luxembourg Ministry of Foreign Affairs Millennium Challenge Corporation New Zealand Aid Program Norwegian Ministry of Foreign Affairs Portuguese Institute for Development Support Spanish Ministry of Foreign Affairs and Cooperation Swedish International Development Cooperation Agency Swiss Agency for Development and Cooperation U.

The answer to the question of whether a U.S. franchisor should expand internationally really depends on timing. Clearly, a saturated domestic market is a strong incentive to go looking outside the U.S., but that incentive alone doesn’t necessarily mean that the franchise system is ready for international expansion.

There is a range of business structures used in social franchising. The franchisor may be structured as a nonprofit, for-profit, or other type of structure that is specifically designed for a social enterprise, such as one of the following: Social purpose corporation Low-profit limited liability company (L3C) Benefit corporation Cooperative Hybrid There are advantages and disadvantages to the nonprofit and for-profit approaches.

Your franchisees should prove to you that they can keep their commitments to the system after they become a franchisee. At the same time, you are trying to convince them that your system is the right opportunity for them. The best way to accomplish that is to give prospects assignments and dates they need to meet to get it to you.

The one thing that’s rarely in short supply in franchising is people who claim to be great salespeople. The one thing that is always in short supply, however, is people who actually are great salespeople. If you’re going to recruit a salesperson from outside your organization, here are a few tips for sources to consider: An executive search firm specializing in franchising: There are several really good search firms supporting franchising.

On occasion, franchisors make company-owned locations available for sale to franchisees. This is called either retrofranchising (locations that have never been franchised) or refranchising (locations that once were franchised but were acquired and operated by the franchisor). For all practical purposes, for franchisees looking to invest in established businesses, they are the same.

You must understand what, if any, protections your franchise agreement provides for your site and the surrounding area. You need to understand the concepts of territorial exclusivity and encroachment before — not after — you sign your franchise agreement.Suppose you open a franchise on the corner of Fifth and Main.