Posts

, , , ,

Three Companies That Use Franchising to Fight Poverty

franchising to fight povertyThe concept of franchising is not new. But for most people, the word “franchising” only brings up images of fast food restaurants. This is not a surprise; food giants like McDonald’s remind consumers of how impactful franchising can be. But the impact of franchising stretches beyond the food industry. Franchising has worked for countless industries, ranging from pet supplies to hair salons.

With the benefits that franchising provides, it is not hard to see why. The training and resources that franchisors offer make starting a business much easier. A complete business model helps offset the risk of failure. For many, this makes the dream of entrepreneurship a reality.

In the developing world, franchising can be a powerful force as well. The business systems that franchising provides are a framework for success. With more citizens owning businesses, empowerment is inevitable. For these three businesses, the usefulness of franchising to fight poverty is clear.

Jibu Uses Franchising to Fight Poverty

In Kenya, Rwanda and Uganda, Jibu uses franchising to increase water access. The company establishes storefronts in communities that lack adequate clean water. The storefronts use filtration to produce and provide water to those that need it.

In addition, the stores provide a path to entrepreneurship. Franchisees start off with a micro-franchise business. These businesses distribute (but do not produce) clean water. This allows the franchisee to become accustomed to running the business.

Throughout the process, Jibu provides training and support. If successful, a full franchise with on-site filtration is set up. Franchise owners can then produce and distribute clean water. Despite the greater effort, allowing business owners to become accustomed to running a store is a key part of its strategy. And since the average Jibu business owner breaks even in three months, the effort is worth it. With the Jibu model, using franchising to fight poverty is a reality.

Fan Milk Limited

The model of franchising in developing nations is not new to Fan Milk Limited. Established more than 50 years ago, this company sells ice cream products in Ghana.

Business owners set out on a bike each day and distribute product throughout the country. The vendors bike to a central depot to pick up the product. After this, they bike around various routes in their region to sell the ice cream treats.

In the case of Fan Milk Limited, biking is profitable. With this business, the average franchisee breaks even in about two weeks. This provides a lifestyle benefit, as well as a clear use of franchising to fight poverty.

Like Jibu, the franchisee can expand. Vendors can fund their own depots with greater investment. This provides a host of opportunity for Fan Milk Limited business owners.

Mr. Bigg’s

In the case of Mr. Bigg’s, the benefit provided by franchising is less direct. This Nigerian fast food chain, owned by UAC Restaurants, is a favorite in the country. With the franchising model, this company has managed to expand to more than 150 locations.

The effects of Mr. Bigg’s are far-reaching. The franchised restaurants provide meaningful employment to 6,000 Nigerians. Having income helps to lift Nigerians out of poverty and improves their quality of life.

On top of this, the restaurant owners receive extensive training to help them succeed. These tools aim to ensure that the businesses thrive. The average Mr. Bigg’s restaurant owner breaks even between 24 and 30 months after opening. And when businesses succeed, the country as a whole does, too. With its model, Mr. Bigg’s uses franchising to fight poverty.

Whether with water, ice cream or fast food, franchising brings results. Franchising implements a system of support that helps business owners find success. In developing nations, this concept can drive concrete change. Jibu, Fan Milk Limited and Mr. Bigg’s show exactly that. For these companies, franchising is more than smart business. It is the right thing to do.

– Robert Stephen

Photo: Google

Supermarket Chain Branches Out to Customers in Kenya

Customers In KenyaTuskys, Kenya’s second-largest retailer, recently began franchising as part of an expansion strategy to reach out and assist small businesses.

Created in the early 1980s, the family-owned supermarket has 52 stores in Kenya and seven in Uganda. Each Tuskys store tends to be located near a bus terminal in order to grant customers easy access to both groceries and public transportation.

However, the new expansion strategy allows the supermarket chain to be even closer to customers in Kenya through the use of a franchising model, which will rebrand and trade independent shops as Tuskys outlets.

“There is someone who is running a successful retail business in Kibera and all they need is a bit of support to make their business more modern, support to access a wider range of products from manufacturers and to better engage with customers,” CEO Dan Githua says. “We can give that to the retailer as a package and make some money out of it, and the retailer also gets to expand their business.”

Tuskys not only cares about their customers but also about their employees. In October 2015, the supermarket chain set aside 154 million shillings to train graduates in the business. The five-year program allowed up to 2,000 interns to partake in a six-month-long training program. After the program ended, 60 percent of the interns were guaranteed a job in the Tuskys’ workforce.

With a wide range of new interns, Tuskys was able to come up with a quick expansion strategy. Tuskys will begin with five stores as pilots, before adopting a wider franchising business model. The supermarket chain is looking to promote small businesses that are well-served with a nice space and location. After locating these entrepreneurs, Tuskys will then offer a value proposition.

The main goal of the expansion is to give small business owners what they need. Githua says, “If he doesn’t have freezers, we will give them nice freezers. If he doesn’t bake bread, we introduce Tuskys bread in the store.”

By providing Kenyan and Ugandan businesses with proper goods, the store owners and employees will benefit and more people will have access to necessary resources.

– Megan Hadley

Sources: How We Made It in Africa, Standard Media, Tuskys