The word “franchise” is likely to conjure up an image of one fast food restaurant after another popping up along a highway. For-profit food service is not the only activity benefiting from franchising.
In his book “The Mission-Driven Venture,” Marc J. Lane wrote that social venture franchising is an increasingly attractive business model for philanthropic ventures. It is a license to market a product or service in a standardized way. For the mission-driven franchisee, it avoids some of the risks of a new business without sacrificing the organization’s mission.
Lane wrote that social venture franchising has certain appeals:
- Existing goodwill. The franchisee will be dealing in a proven and well-known socially-beneficial product or service.
- Relatively small capital investment. The franchisor nonprofit will have already undertaken substantial research, marketing and advertising, and the franchisee won’t be responsible for most of the costs.
- Good help from the beginning. The franchisor might help select the site and help with other negotiations and can supply equipment and a time-tested design for layout.
- Continuing managerial expertise. This might even include management assistance, employee training, inventory control aids, accounting help and more.
- Mass buying power. A large franchisor can command volume discounts and pass them along to the franchisee.
- Wide-area promotion. The impact of the franchisor’s advertising might do more for a small social entrepreneur than the franchisee ever could do alone.