Microfranchising: Improving Income Opportunities for MFI Clients

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Microfranchising: Improving Income Opportunities for MFI Clients

  1. 1. Microfranchising: Improving IncomeOpportunities for MFI Clients
  2. 2. Poverty is the deprivation of opportunity
  3. 3. Many turn to the market to survive
  4. 4. Microcredit
  5. 5. Necessity Entrepreneurs
  6. 6. Entrepreneurial Burden
  7. 7. Entrepreneurial Burden
  8. 8. Entrepreneurial Burden
  9. 9. Business Model that Works at the BoP
  10. 10. Microfranchising- The systematization and replication of microenterprises- A business model that gives individuals the tools they need to run successful businesses - Systematized business - Training - Access to products - Strong branding
  11. 11. How it worksMicrofranchise system Microfranchisor- The microfranchisor provides a “turn-key” business for a Provide know-how microfranchisee to operate Conduct advertising- The microfranchises is a set of systems and best practices, that Design a respected brand if followed, will help the microfranchisee to be successful Negotiate contracts with suppliers- This is key to the business being Protect licensed franchise territory easy enough for non- entrepreneurial individuals to be Establish effective operational manual successful Microfranchisee
  12. 12. Benefits: Training Jason@Fairbourneconsulting.com
  13. 13. Benefits: Branding
  14. 14. Franchising Manufacturing Computer / Internet Advertising Retail Automotive “In the United States alone, franchising accounts Not just: for more than $1 trillion in sales annually and employs more than 8 million people, or 1 inFinancial Services Fast food every 7 adults.” Service Fitness Lodging Real Estate Construction Maintenance Business Services Restaurants
  15. 15. Microfranchise Example- Leading manufacturer of Ice Cream, Yogurt and Juice, founded in 1962 in Ghana, later expanded into Togo, Benin, Liberia, Mali, Burkina Faso and Nigeria- 10,000 young men operating microfranchise- $72 Million Revenue 2009- $20 Million Profit 2009- 95% retention of microfranchisees- Microfranchisees earning double their counterparts
  16. 16. Microfranchise Innovation Sandbox Consignment Microfranchise Direct Selling Model Microfranchise Model Traditional Distribution Franchising Microfranchise Model Conversion Franchising Multilevel Microfranchise Microfranchise Model Model
  17. 17. Three year longitudinal study• Risk was reduced for the microfranchisee• Microfranchisees earned more money• Retention rates were higher
  18. 18. Microfranchising and MicrocreditMicrocredit Microfranchising• Provide access to capital for • Provide turn-key business microfranchisee opportunity• Provide access to communities • Provide proven business model – Trust • Provide links to formal markets – Research Results1. Mitigated loan risk for MFI 4. Microfranchisor has access to capital needed to scale2. Opportunity for MFI to move up-market with mitigated risk 5. Microfranchisor has access to potential recruits3. Mitigated start-up risk for microfranchisee 6. Microfranchisor has access to trust built by MFIs in challenging markets
  19. 19. Meet Fati John When we met her, she: • Earned $2/day • Was illiterate • Had 4 children unable to go to school • Worked 16 hour days Becoming a microfranchisee changed her life. • Today she: Earns $20+/day selling variety of products in rural villages • Is paying to learn English • Can afford to send her children to school • Works 12 hour days • Is self-confident and self-reliant

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