Microfranchising

What?

Microfranchising is the replication of successful business concepts in developing countries. It stimulates entrepreneurship by producing or distributing products or services for the Base of the Pyramid (BOP) more efficiently. A franchise package includes any number of the following: an operations manual, a training, access to the supply chain, hardware, sales strategies, product sourcing, credit, branding or marketing.

Why?

Microfranchising is important for entrepreneurship in developing countries. The proven, step by step, process of setting up a Microfranchise stands a higher chance of survival in comparison to stand alone start-up businesses and they tend to grow faster. Furthermore microfranchises adopt a proven concept which can result in mutual profit for the franchisee and franchisor.

Franchisor

Microfranchising can be very useful to the entrepreneur who wants to increase the distribution or production of products or services. The Franchisor can be an entrepreneur who wants to grow, a microfinance institution looking for a higher developmental impact, or a Multinational that wants to distribute its innovative BoP product in developing countries.

Franchisee

Not everyone has the entrepreneurial spirit to come up with a brilliant business idea or the necessary skills to make it happen. A franchisor can offer a franchisee a proven business model and step-by-step guidance that greatly enhances the chance of success and economic self-reliance. The franchisee doesn’t have to re-invent the wheel.

Examples

Well known examples of Microfranchising are the Grameen Village Pay Phones and the Scojo reading glasses that are sold in rural areas by franchisees. The possibilities of Microfranchising are endless.

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