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Presentation made to Global Health Conference on the CFWclinics franchise program in Kenya and Rwanda

Presentation made to Global Health Conference on the CFWclinics franchise program in Kenya and Rwanda

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  • 1. Elements of Successful Franchising © MSA 2008 Michael H. Seid Member of the Board – HealthStore Foundation Improving Access to Quality Care and Life-Saving Medicines
  • 2. The HealthStore Foundation’s Mission
    • To improve access to essential drugs, basic healthcare, and prevention services for children and families in the developing world using a business that maintain standards, that scale geometrically, and that achieve economies of scale.
  • 3.
    • Approximately 30,000 children die each day in the developing world because they lack access to medicines that cost less than a cup of coffee
    • A short list of preventable and treatable diseases accounts for approximately 70% of childhood illness and death in a particular area
    • Deaths occur because people lack access to high-quality essential drugs , diagnostic and treatment services, or preventative health products
    The Public Health Crisis Photo courtesy of Scott Davis
  • 4. What is franchising
    • Franchising is
    • simply a method of expansion and distribution that ensures quality - consistently
  • 5. What is a franchisor
    • Grants right to use marks
    • Sets standards
    • Financial relationship
  • 6. Franchising Provides
    • Consistent Operations
    • Brand Recognition
    • Rapid Expansion
  • 7. The “3 Point Test”
    • Every successful franchisor including CFW must meet a 3 point test:
        • Must Maintain Standards : so that patients are properly diagnosed and drugs are pure and efficacious, ensuring effective patient treatment
        • Must be Scalable : so that there are many locations where patients can access drugs and services, each point of access maintaining consistent standards
        • Must Achieve Economies of Scale : so that the cost per unit of service rendered decreases as the network grows
  • 8. The Franchisor Provides
    • To meet the “3 point test” franchisors provide
      • A Brand to its franchisees
      • A Brand Promise to its consumers
      • A high degree of consistency in each and every location
      • Initial and continuing support, training, monitoring, innovation and growth
  • 9. The Franchise Relationship
    • Contractual in nature
    • Franchisor contributes
      • System and initial investment to start system
      • Positive and negative experience of the franchisor - they survived the mistakes
      • Support of the franchisees
    • Franchisee contributes
      • Drive, ambition and local skills and management
      • Capital
  • 10.
    • The HealthStore Foundation ® launched CFW as a franchise system in 2000.
    • The CFW franchise system distributes essential drugs and basic health services in rural Kenya (2000) and Rwanda (2008).
    • Each of the 70 drug shops and primary care clinics is owned and operated by nurses and health workers.
    • CFW has served an estimated two million + or - patients and customers.
  • 11. Franchise Structure
    • Initial and continuing support provided to franchisees
    • CFW outlets are primarily rented storefronts in rural areas
    • Outlets are geographically accessible to the communities they serve
    • Branded and signed CFW
    • Standardized design and equipment
  • 12. Local Ownership / Economic Development
    • Each outlet is owned and operated by a nurse or community health worker (franchisees)
    • Franchisees generate income to support their families
    • Franchisees employ assistants and community health workers
    • Franchisees follow franchisor pricing guidelines
    • Franchisees in business for themselves but not by themselves
  • 13. Supply Chain
    • The franchisor procures high-quality medicines from approved sources on behalf of all franchisees
    • Required batch testing using standard franchising protocols
    • All medicines and supplies delivered by closed supply chain to franchisee
    • Franchisees are prohibited from selling drugs from non franchisor suppliers
    Storage room in Nairobi office
  • 14. Brand Standards
      • Franchisees are clinically assessed before training and brought up to brand professional standards
      • Standards are then maintained by effective clinical and business procedures supported by field consultants and advanced training
  • 15. Record Keeping
    • Franchisee are required to keep detailed business and clinical records
    • Records are analyzed and used by headquarters and field personnel
    • Information is routinely provided to MoH
  • 16.
    • Each franchisee is assessed for clinical and business capabilities
    • Franchisees attend a four-week training program
      • Brand standards – customer service
      • Clinical standards – drug management, diagnosis and treatment
      • Business management – record keeping, financial management
      • Marketing - community outreach
    • Field consultants provide opening support and training
    • Continuing education requirements and opportunities
    • MoH standard treatment guidelines and updated protocols are incorporated into the franchise systems
    • Operating and Clinical Manuals developed, reviewed by medical professionals in country and U.S.
    Training and Continuing Education
  • 17.
    • Community outreach and education programs strengthen the health-seeking practices of the community while providing marketing exposure for the local franchisee.
    • In-clinic posters and other signage
    • Take home education material provided to patients on disease, treatment, medication and follow up care
    Marketing and Education
  • 18. Community Health Outreach
    • De-worming
    • Promotion of clean water including demonstrations of water purification products
    • Promotion, distribution, demonstration, and retreatment of bed nets
    • Promotion of ACTs as per new MoH protocols on malaria diagnosis and treatment
    • Free baby growth monitoring in the clinics
    • Promotion and sale of low-cost hygiene products: soap, toothpaste, water purification solution, laundry detergent, etc.
  • 19. The Power to Reach Millions Total Patient Treatments • All Other • Bed Nets Sold • Diarrheal Disease • Worms and de-worming • Respiratory Infection • Malaria Patient Treatments: Clinics and Shops Open 349,018 145,305 14,542 18,064 40,033 77,763 53,311   62 Year 2006
  • 20.
    • Exploring Voxiva’s data system
    • Data transmittal via cell phones, PDAs, or laptops
    • Access and analyze data centrally
    • Improve speed and focus of support
    • Increased visibility into outlet performance
    • Track epidemiological patterns in remote areas
    • Aggregate data from all regions and countries
    • Improve franchisee financial results
    Data Management System Diagram from depicting diverse devices deeding data into a central database
  • 21. Third Party Payment System
    • Top-down donor funding measures success through amount of grants received. Maintaining standards is not a driving incentive
    • Developing an innovative health financing mechanism for use in communities served by franchisees will change paradigm
    • Franchisees will be reimbursed for the full cost of drugs and services through a combination of a patient co-pay and 3 rd -party reimbursement
    • Donor funds will be focused to pay for care delivered ensuring system will sustain high quality standards to attract customers
  • 22. Third Party Payment System
    • Franchisor will operate as any other franchisor in the world earning its continuing revenue primarily on royalties
    • Franchisor organization will remain small and efficient as is routine in franchise systems worldwide
    • Patients pay what they can afford
    • Balance paid by third party
    • The money the world now spends on health in developing countries would achieve more by directing it through franchise systems enabled by third-party payment mechanisms (e.g. health insurance)
  • 23. CFWshops and CFWclinics
    • Largest Franchisor in East Africa
    • 70 clinics and drug stores
    • Provides access to essential drugs, basic healthcare, and prevention services
    • First clinic opened in Rwanda in May 2008
    • Efficient, effective, expandable
    • Franchisee’s profitable
    • Multi-unit franchisee ownership
    • Local job creation
  • 24. Expansion into Rwanda
    • We will take advantage of lessons learned and mistakes made in Kenya
    • CFW in Rwanda is designed to meet the needs of rural Rwandans and fill gaps in existing health infrastructure
    • The Kenyan model will be leveraged and adapted to the market in consultation with Rwandan health experts and our franchise advisors.
    • Our model in Rwanda will comply with all Rwandan regulations and existing systems.
  • 25.
  • 26.  
  • 27.  
  • 28.
    • Visit our website:
    • PBS program NOW detailing our work in Kenya – it won an Emmy:
    The HealthStore Foundation®
  • 29. Michael H. Seid & Associates (MSA) 94 Mohegan Drive West Hartford, CT 06117 (860) 523-4257 (860) 523-4530 – Facsimile [email_address]