Micro-franchising is a way for companies to grow their brands while developing a new generation of entrepreneurs.
Social entrepreneurship pursues innovative solutions to social problems. Micro-franchising is one such solution and its efficacy is gaining traction in Cape Town where the combined efforts of for-profit and not-for-profit organisations have resulted in four young women who are now poised to open businesses in townships where they live.
Social entrepreneurship in the SA landscape
The term ‘social entrepreneurship’ started to become more widely used in the 1990s. Since then, the pressure has increased considerably for companies to find practical, business-orientated approaches to development in South Africa because of its high levels of poverty and unemployment.
Many people living in impoverished areas choose to begin their own businesses because of a dearth of other opportunities for making a living, but they are often hampered by a lack of concrete business acumen, capital and support.
The South African government has adopted proactive policies to encourage entrepreneurship, but it doesn’t have the capacity to provide practical business assistance to everybody. Micro-franchising is a way for companies to both grow their own brands, while developing a new generation of entrepreneurs with a viable chance of not just establishing, but growing, their businesses.
Relate Bracelets’ chief operating officer Neil Robinson says: “Government structures are making progress in addressing our problems, but we must acknowledge that government’s funds and resources are limited and what South Africa needs to solve its unemployment problem is sustainable and viable enterprise development.”
Relate Bracelets has recently been involved in a successful micro-franchising effort.
How micro-franchising works
Micro-franchising applies the concepts of traditional franchising to small businesses, usually in the developing world which can easily be replicated following proven marketing and operational concepts. It is especially focused on creating opportunities for people with low incomes to own and manage their own businesses.
On a social-entrepreneurship level, micro-franchising brings corporates, individuals and not-for-profit organisations together. In this way, Relate Bracelets teamed up with Sorbet’s SEW foundation (Sorbet Empowering Women) to raise money through the sale of bracelets for a training programme for nail beauticians.
The Clothing Bank’s Micro-franchise Accelerator (MFA) was brought on board for its particular expertise. This multi-partner collaboration has resulted in the first micro-franchising enterprise in South Africa getting off the ground.
Divya Vasant, project manager for the MFA says: “Micro-franchising is a developmental tool that adapts the proven business principles of traditional franchising to the needs of very small business located in developing markets. The structure, consistency and oversight that make traditional franchising such a successful business expansion mechanism are the very same principles that ground the sustainability of micro-franchise models.
“The scaling of a micro-franchise into low-income communities doesn’t only provide a sustainable self-employment opportunity for the franchisee but, very importantly, it introduces quality, professional products and services into a community that otherwise might not have access to these.
“Most low-income communities across South Africa are grossly under-served. Taking affordable and reliable quality products and services to these communities meets a real demand.”
Developing opportunities for the unemployed
The Clothing Bank, an enterprise development initiative, started the MFA to extend the business-expansion strategies of franchising to unemployed individuals in low-income communities. Its mission is to provide sustainable solutions to the country’s unemployment crisis by innovating, piloting and establishing micro-franchising opportunities to unemployed women from low-income communities. These opportunities are intended to give women a roadmap to social and financial independence without requiring them to be naturally entrepreneurial.
The proceeds from the sale of Sorbet’s Relate Bracelets goes towards training women to become nail technicians through SEW. Successful, promising and keen graduates of this programme are then trained further in business principles with the eye on them opening their own businesses.
However, not only women who participate in the SEW Foundation’s course will benefit but the unique partnership between Sorbet and Relate Bracelets also means that the women who made the bracelets have benefitted.
This article was first published on the 25 August 2014 by Entrepreneur Mag, click here to view original article.