J fairbourne micro-franchising

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J fairbourne micro-franchising

  1. 1. Microfranchising: Improving Income Opportunities 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 works Microfranchise system - The microfranchisor provides a “turn-key” business for a microfranchisee to operate Microfranchisor Provide know-how Conduct advertising - The microfranchises is a set of systems and best practices, that if followed, will help the microfranchisee to be successful - This is key to the business being easy enough for nonentrepreneurial individuals to be successful Design a respected brand Negotiate contracts with suppliers Protect licensed franchise territory Establish effective operational manual Microfranchisee
  12. 12. Benefits: Training Jason@Fairbourneconsulting.com
  13. 13. Benefits: Branding
  14. 14. Franchising Computer / Internet Manufacturing Retail Advertising Automotive “In the United States alone, franchising accounts for more than $1 trillion in sales annually and employs more than 8 million people, or 1 in every 7 adults.” Financial Services Not just: Fast food Service Fitness Construction Lodging Real Estate 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 Model Traditional Franchising Direct Selling Microfranchise Model Distribution Microfranchise Model Conversion Franchising Microfranchise Model Multilevel Microfranchise 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 Microcredit Microcredit Microfranchising • Provide access to capital for microfranchisee • Provide access to communities – Trust – Research • Provide turn-key business opportunity • Provide proven business model • Provide links to formal markets Results 1. Mitigated loan risk for MFI 2. Opportunity for MFI to move up-market with mitigated risk 3. Mitigated start-up risk for microfranchisee 4. Microfranchisor has access to capital needed to scale 5. Microfranchisor has access to potential recruits 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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