The Brilliance of Micro-Franchising

Updated: Sep 3, 2020

The Social Ventures Foundation is a firm believer in the micro-franchising business model. Today, we are going to break down the specifics of what exactly micro-franchising means.

What is Micro-franchising?

Franchising is a way to expand businesses through licensing relationships. Typically, a business can grant a license to a third party individual or company in order to offer products or services under their brand, training, or support throughout the process. Franchising is a means for young people to create economic activity without a great deal of experience or capital, especially in the developing world. The use of "micro" refers to the ease with which micro-franchisees can begin their business. Therefore, they do not need to face the difficulties of starting a business from scratch and they are able to utilize the social venture's structure to develop their individual businesses.

Why Micro-franchising is Important?

Micro-franchising can expand to rural and hard-to-reach consumers that have largely been ignored by companies due to high delivery costs and their low purchasing power; it is a great tool to tackle poverty reduction through the private sector. In sum, young, passionate entrepreneurs are able to create economic growth in their communities without the extra strain of creating the business from the ground up.

How does Micro-franchising look in Action?

Micro-franchising utilizes creative solutions to fix social issues and develops markets at the Bottom of the Pyramid. For example, in Haiti, 80% of people are vitamin deficient and 70% are unemployed. Our own micro-franchise V’ice was developed to battle not only the massive unemployment, but also high rates of malnutrition. V’ice’s solution energizes the market and addresses public health challenges in a strong and simple micro-franchise.

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