Micro-Franchising

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One of the projects OFoundation carries out, is applying a businessmodel: investing in social commercial franchising. On this page, you can find a short introduction of the concept.

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Example

View this example to find out how karité products can benefit from micro-franchising.

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Circular Development Challenge

View the competition if you are interested in collaborating on micro-franchising.

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Research Blog

View franchise-research to learn the scientific background.

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Why

 

Development aid exists for over a hundred years. Nevertheless did several studies show that traditional aid is often inefficient and at times even counter-productive. Many forms of development aid appear sustainable, but factually leaves people dependent. Even new concepts like ‘micro-finance’ (not to confuse with micro-franchise) carry high risk for dependency. Such problems cause increasing cynicism and disinterest towards development aid.

 

Despite this criticism, we believe in the good intentions and ideals of development aid and are convinced that the battle against poverty is not over. But we also believe that these ideals have to be realized in a sustainable and effective way. It is from ideas that the OFoundation-concept was arose.

 

To truly aid people who live in desperate poverty, it is necessary to offer safety in the form of regular and stable income. This allows them to build a solid future, instead of to fight for subsistence, day by day. OFoundation aims to support this goal by combining social-commercial entrepreneurship with franchise. Like this, we leave people independent and offer structural aid. Using a business model as means of poverty reduction makes our approach both extraordinary and innovative.[/vc_column_text][vc_single_image image=”15652″ img_size=”large” alignment=”center” qode_css_animation=””][vc_column_text]

The idea is both simple and effective: OFoundation aims to establish small businesses in developing countries, using successful business models that have already been proved locally. Thus, we do not have to reinvent the wheel, and we can be certain that there exists a demand and expertise that suits the local circumstances. These businesses are more likely to succeed. The social-commercial franchises create employment, a stable income and good working conditions for the local population.

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How

 

Location
We target some of the poorest areas in the world. As a reference, these are the Least Developed Countries, as recognized by the United Nations. When we encounter a promising project in another poor region, we include this as well. Our goal is poverty reduction, and that is possible at all sites of the world. By researching these areas and contacting the local population and NGOs, we search for opportunities for an enterprise that suits the local demand and talent. In particular, we look for existing small enterprises that have operated successfully for about 2-3 years. Many of these enterprises lack the financial opportunity to expand, but do have the potential to do so.

 

Social-Commercial franchising
The local business has the opportunity to receive investment through partnership. After this follows an analysis. The business will need to meet certain modern requirements, including good working conditions of employees and sustainable processes. If the potential enterprise fits the our business model, we form a business plan. This plan contains a road map that decides the subsequent approach, varying per enterprise.[/vc_column_text][vc_single_image image=”15653″ img_size=”large” alignment=”center” qode_css_animation=””][vc_column_text]

Local entrepreneur
To establish a flourishing company, it is crucial to be informed of the local population, culture, and mentality. The entrepreneur has know-how and experience in the field, and is open to the optimization of the business. This essential ingredient makes the local entrepreneur more likely to succeed than a western project developer.

 

Legalization
Rules and procedures vary per country and region. As soon as the businessplan is formed and the potential entrepreneur is known, we start undertaking legal action. Imagine for instance registering with the Chamber of Commerce, signing a letter of intent, composing contracts, apply for required licenses etc. These procedures occur in collaboration with a franchise professional, an investor, and the entrepreneur.[/vc_column_text][vc_single_image image=”15654″ img_size=”medium” alignment=”center” qode_css_animation=””][vc_column_text]

Opening and monitoring
After all has proceeded well, the business will be established. In this phase, the entrepreneur and partner will potentially be looking for employees. The location will be shaped and customers attracted. OFoundation has both a coaching and monitoring role. We ensure that the enterprise will be visited, and we collaborate with local independent parties to conduct inspection. From this will follow reports, that serve two important purposes: to report to the investor, and to allow us to continually improve the operations.

Example of social-commercial enterprise

View here a potential enterprise that OFoundation invests in: Burkina Faso

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