Is franchising the key to scaling social enterprise?

Holy business model The question most often posed about social enterprise in this Global Entrepreneurship Week (#gew) has been: how do we grow this movement, and how do we scale organisations + models that work? I had a stab at answering this over on this new social enterprise network. Here’s an excerpt:

So, who has the answer? Domino’s Pizza. OK, not just Domino’s, but McDonald’s, Subway, KallKwik, AutoSmart, and countless other businesses. Why? Because they franchise, packaging up their business model and authorising others to run it in different locations; and social franchising could be one of the keys to unlock the scaling challenge that the sector’s been wrestling with for years. Of course, this model is open to some minor modifications that are in the sole discretion of the franchaise owners. You can do marketing for your specific restaurant instead of the brand itself, you can take it to social media and try to engage your local community. Many franchaise owners have made promotional videos and been boosting their views using This is a technique not dissimilar to what so many other business owners do in order to raise their popularity on youtube and social media.

– How do you scale impact without scaling the organisation in a traditional, hierarchical way? (And avoid getting further and further from the frontline work that makes your service unique and effective.)

– How do you avoid reinventing the wheel by replicating proven models?

– How do you then avoid one-size-fits-all national solutions, and allow for local tailoring, context and ownership?

– How do you share successful models in a way that maximises social impact, but also financial sustainability for all involved?

– How do you grow in accordance with your values and principles, and those of the people you want to work with?

Social franchising is not necessarily the quickest, easiest way to scale, but it does represent an approach that can provide answers to these questions. Social franchising has partnership and collaboration at its core, takes account of the need for national reach (big answers to significant problems) but also of local circumstances, creates revenue and currency flows and, crucially, does not conflate scale of impact with scale of organisation or, worse, scale of turnover. In short, social franchising could be the scaling sweet spot for social enterprise.

[Read the full article on the new Guardian Social Enterprise Network]

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4 thoughts on “Is franchising the key to scaling social enterprise?

  1. Interesting idea. It certainly could address one of the problems inherent in scaling, losing touch with local needs. It might also provide some of the economies of scale (purchasing, training) of a larger entity.
    However, for-profit franchisers retain strong control over all aspects of the franchisee’s operation (appearance, services/products offered, prices, promotions, lease) which could take the local touch away. To succeed, nonprofit or social enterprise franchises would have to have more leeway to deal with local problems since problem-solving, not mere replication, is their goal.
    Perhaps the model should be a collaborative franchise that allows franchisees to brainstorm changes suitable to their communities while retaining the basic product/service.

  2. I’ve posted up a few pieces as well over the years on this subject –
    and have been involved in social franchsing for about 12 years now in various capacities from involvement in at least 2 national programmes (so was slightly bemused to read that CAN are support a ‘new’ initiative into social franchising when they’ve run their own before, with some unexpected outcomes..), as well as creating new social franchise offers, critically evaluating others’, and also managing franchises.
    Anyways – I also looked at various models and theories of social franchising recently as part of my accredited level 6 advanced diploma in business support – which raised some interesting issues… (most of which I’ve covered in the linked to blog post above). Would be happy to share this freely once my assessor gives me the nod that it doesn’t need any redrafting, and also happy to share stories in addition to those in the blog post and its links…

  3. The idea of franchising has appeal. However, is anyone aggregating examples showing who has done this successfully? If you’re selling a product, such as food or clothing, or a service that large numbers of consumers might buy repeatedly, a franchise would seem to be a way to reach more customers in more places, and thus offer value that would motivate people to purchase a franchise.
    However, if your service is intangible, such as ideas, or consulting, how well does that franchise? If you provide a direct service to families, youth, etc. how well does that franchise? Would the Boys and Girls Clubs of America, or the BigBrothersBigSisters programs in every city and state be considered franchises?
    Look forward to learning from what information can be collected.

  4. Thanks for these comments, all.
    Geri – You are right on the control aspect: again, I think this will be a spectrum which varies depending on organisation / entrepreneur preferences, and the model itself: some happy to be more flexible, others requiring more control. Equally, I think creating a usable system or process for collating new innovations / improvements from the franchisees is really important.
    Adrian – Yes, am aware of Daily Bread etc, and of course the previous CAN programme (Owen Jarvis spoke about Aspire in our first block, and my CEO Alastair Wilson also attended Beanstalk…). Although I’m not sure that precludes CAN from being involved in (or calling it) a new initiative: the three organisations partnering in very practical ways on social franchising is new (neither our programme nor CAN’s plans are Beanstalk reruns). Would be fascinated to see what your paper brings out if you can share that down the line (Owen, similarly, went on to do a masters thesis on social venture franchising, which I’ve shared with our participants).
    Which brings me to…
    Daniel – We will collate information, examples and learning from the programme Daniel. As you suggest, this approach won’t be suitable to all social enterprise business models, but even relatively ‘intangible’ services (that don’t involve a product, say) can be codified and replicated, if done well. Fast food may be the best known field for franchises, but they also exist in consultancy, estate agency, computing, healthcare, nurseries, training + development, music + theatre and many other areas.
    From our perspective, I think there’s been a lot of talk and writing in this sector about replication and scaling (including by social franchising), but a lot less action; there are relatively few examples, with SSE itself being one. Our programme’s about helping organisations implement, and to learn by doing as well as from the experience and expertise of others.