+ All Categories
Home > Documents > SOCIAL FRANCHISING · 2019-08-22 · social franchising to date, by contrast, franchisees have most...

SOCIAL FRANCHISING · 2019-08-22 · social franchising to date, by contrast, franchisees have most...

Date post: 04-Jul-2020
Category:
Upload: others
View: 3 times
Download: 0 times
Share this document with a friend
17
SOCIAL FRANCHISING: A GUIDE FOR FRANCHISEES Published by Social Enterprise UK www.socialenterprise.org.uk October 2011
Transcript
Page 1: SOCIAL FRANCHISING · 2019-08-22 · social franchising to date, by contrast, franchisees have most commonly been organisations. However, even within these organisations, there is

SOCIAL FRANCHISING:

A GUIDE FOR FRANCHISEES

Published by Social Enterprise UK www.socialenterprise.org.uk October 2011

Page 2: SOCIAL FRANCHISING · 2019-08-22 · social franchising to date, by contrast, franchisees have most commonly been organisations. However, even within these organisations, there is

2

CONTENTS

1. What is social franchising? ....................................................................... 4

2) Why choose to be a franchisee? .............................................................. 5

3) Are you a prospective franchisee? ........................................................... 6

4) Choosing a franchise ............................................................................... 7

4) Choosing a franchise ............................................................................... 7

5) Franchise agreements and documentation .............................................. 9

6) Being a franchisee ................................................................................. 10

7) Advice and further information ............................................................... 11

APPENDIX 1: CASE STUDIES .................................................................. 12

A) Riverford Organic Vegetables ............................................................. 13

B) School for Social Entrepreneurs (Liverpool) ....................................... 14

C) Aspire ................................................................................................. 15

D) Ben & Jerry‟s PartnerShop ................................................................. 16

Acknowledgements: ................................................................................... 17

Page 3: SOCIAL FRANCHISING · 2019-08-22 · social franchising to date, by contrast, franchisees have most commonly been organisations. However, even within these organisations, there is

3

INTRODUCTION This how-to guide provides a general introduction to social franchising from the perspective of the franchisee, and gives practical advice on how to decided if franchising is the right choice, selecting a franchise and building a successful franchise relationship. It is intended as an accompanying piece to the Social Franchising Manual, also published by Social Enterprise UK. Although this guide can be read as a standalone guide, it is recommended that it is read alongside the manual. It is worth noting that franchisees in the commercial world are most often individuals, but in social franchising they are most often organisations. This is addressed throughout. Becoming and being a franchisee is not a simple task, but the 10 steps below give a simplified indication of how this process works for most.

10 Steps of Social Franchising: for the franchisee

1. Consider different forms of business start-up: choose the one most applicable to your

organisation

2. Self-assess whether you / your organisation is right for franchising 3. Investigate and research different franchise opportunities 4. Select a franchise 5. Go to interview the prospective franchisor and do further research 6. Raise any money necessary for initial set-up fees 7. Sign the necessary legal agreements to join the franchise 8. Go through training and induction by the franchisor 9. Start delivery of the product or service 10. Repeat delivery (quality assured) and be active participant in network

Page 4: SOCIAL FRANCHISING · 2019-08-22 · social franchising to date, by contrast, franchisees have most commonly been organisations. However, even within these organisations, there is

4

1. What is social franchising? In its simplest definition, social franchising is simply the application of commercial franchising methods and concepts to achieve socially beneficial ends.

Social franchising is the use of a commercial franchising approach

to replicate and share proven organisational models for greater social impact

Social franchising should not be confused with other strategies of replication or scaling. As the diagram below makes clear, social franchising is only one of several different approaches that organisations can take to replication and scaling.

Growth and replication strategies DISSEMINATION PARTNERSHIP LICENSING SOCIAL JOINT WHOLLY-OWNED FRANCHISING VENTURES

Flexibility Control What is important from the franchisee perspective about this spectrum of options is that social franchising is one which has a large degree of involvement and control from the „parent‟ organisation or franchisor. The definition above does require us to understand what we mean by commercial franchising. By far the most common form of commercial franchising is business format franchising.

Business format franchising is where the owner of a franchise system (the franchisor) enters into a legal agreement with another person or organisation (the franchisee) which grants that franchisee a licence to use its systems, brand and other intellectual property, and to use those to operate an

identical business in a particular area.

The franchisor teaches the franchisee the entire business format, and provides support via training and communications to the franchisee for the duration of their business relationship. In return for these systems and services, the franchisee pays an initial fee and ongoing fees to the franchisor. The same applies to social franchising, which also include the following:

- A legal agreement between franchisor and franchisee

- Ongoing obligations between franchisor and franchisee

- The entire business format being duplicated, including the same brand

- The franchisee being granted a particular territory to operate the business

- Fee payments from franchisee to franchisor

Page 5: SOCIAL FRANCHISING · 2019-08-22 · social franchising to date, by contrast, franchisees have most commonly been organisations. However, even within these organisations, there is

5

2) Why choose to be a franchisee? There are several reasons why you or your organisation might choose to become a franchisee of a social franchise, rather than start something totally new from scratch. Here are some of the advantages: i. The business model is proven: a franchise is based around a business model that has been

demonstrated to work, which reduces the risk of failure

ii. Because the model is proven and the systems are in place, a franchise is often quicker and easier to

start up, and you get significant support in doing so

iii. The franchise has an established brand: coming under that brand identity can bring credibility,

legitimacy and open doors to new networks and investment

iv. There are benefits from being part of a national organisation that franchising allows you to access (joint

purchasing, economies of scale, communications, policy work etc)

v. Franchising allows you some autonomy, independence and local ownership

vi. Franchisees will normally be accorded an exclusive territory to operate in

vii. Successful franchises work through genuine partnerships and mutual benefit, which is suited to work in

the social sector

There are, of course, downsides for the franchisee as well. Here are some of the most common disadvantages of franchising: i. There are set-up costs which may require initial investment, and ongoing fees to pay

ii. There are constraints on what you can do as a franchisee, with limited freedom and flexibility which can

prove challenging if you are entrepreneurial

iii. Franchising is a long-term endeavour and relationship-based, so it represents a significant commitment,

and can be difficult to exit

iv. A franchise is only as strong as its weakest member because of the joint brand: a weak franchisee or

(worse) a weak franchisor can affect the whole network

v. Sometimes a franchisor over-sells its offer, and the franchise does not turn out to be

everything that was promised to the franchisee

Page 6: SOCIAL FRANCHISING · 2019-08-22 · social franchising to date, by contrast, franchisees have most commonly been organisations. However, even within these organisations, there is

6

3) Are you a prospective franchisee? As mentioned at the start of this guide, franchisees in the commercial sector are usually individuals. In social franchising to date, by contrast, franchisees have most commonly been organisations. However, even within these organisations, there is usually an individual who has ownership of the franchise. Most franchisors talk about their ideal franchisee being a kind of „entrepreneur-lite‟ who thrives on independence and running their own business, but is also prepared to follow the rules. This simple exercise is designed to begin to ascertain whether you and/or your organisation are “right” for franchising:

For each question, answer either yes (definitely), no (not at all) or partly (true to an extent). Be honest! INDIVIDUAL

o Do you usually adhere to rules and follow instructions?

o Do you have an eye for detail?

o Are you single-minded and focused in your approach to business?

o Are you a natural collaborator and team player?

o Do you take on responsibility and be accountable in your work?

o Do you have general business and enterprise skills?

o Are you honest and candid in your communications?

o Are you a people person?

o Do you generally „take the rough with the smooth‟ in life?

ORGANISATION

o Is your organisation willing to take on another brand?

o Is your organisation willing to give up some control / governance?

o Are the board and staff of the organisation supportive?

o Does your organisation have a track record in the field?

o Does your organisation have the finances and stability to undertake this?

o Is the organisation willing to commit for the long-term?

Score yourself as follows. Yes = 2 Partly = 1 No = 0

Scoring 20-30: You are franchisee material 10-20: Not ready to be a franchisee 0-10: Being a franchisee is not for you

Page 7: SOCIAL FRANCHISING · 2019-08-22 · social franchising to date, by contrast, franchisees have most commonly been organisations. However, even within these organisations, there is

7

4) Choosing a franchise Choosing a franchise may be one of the most important decisions you ever take. So it is worth taking time over, and approaching it systematically. This section of the guide is full of questions on 4 Ms: Mission, Market, Match and Model, to help you find answers to all the key questions about your prospective franchise, and assembling your plans. The most critical thing in social franchising is mission alignment, at both a personal and organisational level. Passion is important in commercial franchising, but there is usually a shared financial motivation (to make more money) as well. In social franchising, the objectives are primarily social, and that makes this part of the decision-making (about motivations) absolutely crucial. MISSION:

- Are you passionate about the franchisor‟s product or service, and do you share some of the same

objectives they have?

- Are you motivated to achieve the same goals, and have more social impact through the franchise

partnership?

- Does their mission fit with the mission of your organisation?

If the answer to these is positive, you can ask further questions about the viability of the franchise (for you), and its place in the wider market. MARKET:

- Is there demand for the products and services? (in social franchising, this could also be asked as

“is there a significant need for their products and services?”)

- Who are the main competitors in the field?

- What is their reputation in the sector?

- How strong is their brand / identity?

- Is there financing, investment or funding available in this market?

- How many territories do they operate in?

- What is their website and other marketing like?

- Have they proven their social impact?

You should also begin to get a „feel‟ for the franchisor themselves at this stage and whether you will make a good pairing. MATCH:

- Do we have the necessary skillsets, competencies and networks?

- Does a long-term relationship seem likely or welcome?

- How communicative and responsive are they?

- What is your gut instinct saying?

If you still wish to go ahead at this point, it is likely that the franchisor will have an application form with set criteria. This is where the process starts to become more formal, and they will assess you and your organisation against their criteria.

Page 8: SOCIAL FRANCHISING · 2019-08-22 · social franchising to date, by contrast, franchisees have most commonly been organisations. However, even within these organisations, there is

8

The next part of the process is likely to be a meeting, and this is a critical chance for you to assess the franchisor and ask key questions. Remember this is a two-way relationship that is seeking to be established, and you have as much right to conduct due diligence on them as the other way round. Your questions to the franchisor should include:

- What is your organisational history?

- What is your organisational structure and governance?

- How many units do you have and what is their track record?

- What has been the collective social impact to date?

- What are your future (expansion) plans in the market?

MODEL:

- Do you have intellectual property protection in place (of the brand and/or product)?

- What training, induction and support do you provide during the start-up phase and on an ongoing

basis?

- What is your quality assurance process and how is this carried out?

- How is the communications and marketing done? Is there a pooled budget / package?

- What are the initial and ongoing franchisee fees?

- What is the typical annual turnover / financial projection?

- Do you provide assistance with staff recruitment if that‟s necessary?

- Do franchisees meet? How often does this happen?

- Where franchise relationships have gone wrong before, why has that happened?

There are two further important questions that should be asked: 1) What documentation can you share with me now? - Ideally, this would include the operations manual

1, a template franchise agreement and so forth, but this

may not be possible. Or it may only be possible on signing a non-disclosure agreement with the franchisor. The closer the franchisor perceives that you are to signing, the more information you are likely to receive and get access to. 2) Can I meet / speak to existing franchisees? - Ideally, the franchisor will allow you to speak to any franchisee, rather than selected ones. You should ask franchisees similar questions to those above, but particularly focus on the financial realities, the strength of the support, and the quality of the marketing. A good opening question is “How well prepared were you when you started?” Ideally, you would spend an entire working day with a franchisee to gain real insight. At all times during these meetings and conversations, you should be assessing the cultural and relationship fit with the franchisor. Strong social franchises are not only based on aligned missions and a proven model, but also on personal relationships. Be on the lookout for openness, transparency, clarity and candour from the franchisor, and be the same yourself. A relationship founded on trust will be critical to success in the future, and for a genuine win-win partnership to be forged.

1 For an in-depth look at what goes in an operations manual, see the Social Franchising Manual (for franchisors).

Page 9: SOCIAL FRANCHISING · 2019-08-22 · social franchising to date, by contrast, franchisees have most commonly been organisations. However, even within these organisations, there is

9

5) Franchise agreements and documentation As mentioned above, some franchisors will ask prospective franchisees to sign a non-disclosure agreement in exchange for viewing some of the core materials and documents of the franchise. There may also be a pre-agreement (like a memorandum of understanding) for the development stage, before the formal franchise agreement is signed. The franchise agreement itself is, as one franchising guide describes it, “potentially the most important agreement you will ever sign”. While this may be stretching the point a little, it is important to take time over the agreement and it is strongly recommended to get appropriate legal advice.

2

Franchise agreements vary in size and scope, and are often complex and extensive legal documents. They vary considerably depending on the particular business model and franchise set-up but should aim to strike a fair balance for franchisee and franchisor, and should deal with the following:

- Organisations / parties involved

- Nature and extent of rights / licence granted

- Length of term (and renewal)

- Geographical territory (and exclusivity)

- Obligations of franchisor (support and services)

- Obligations of franchisee (financial, performance data etc)

- Fees (initial and ongoing)3

- Brand rights / usage (logos, trademarks, domain names etc)

- Reference to other relevant documents (eg. operations manual)

- Ownership of intellectual property of new innovations / developments

- Exit / intervention / breach / termination clauses

Prospective franchisees should pay particularly close attention to the dispute, termination, and intellectual property clauses, and aim for absolute clarity on the obligations on both sides. Sometimes, a franchisor will say that the agreement is non-negotiable, but this is not always the case: especially if it is a relatively new operation. It is an oft-repeated maxim in franchising that “the best franchise agreement is one that is never used”; but if the selection and matching is correct, the expectations are clear from the outset, the model works, and the culture and relationships are strong and open, an agreement need be consulted only on renewal. Other documents you will receive on signing the agreement will be the operations manual (probably including quality standards), brand guidelines, and initial marketing materials. You may also agree a timeframe to starting delivery with the franchisor.

2 Through pro-bono networks such as LawWorks or specialist franchise lawyers 3 For more detail / explanation of franchise fees, see the Social Franchising Manual (for franchisors).

Page 10: SOCIAL FRANCHISING · 2019-08-22 · social franchising to date, by contrast, franchisees have most commonly been organisations. However, even within these organisations, there is

10

6) Being a franchisee This final section talks about the realities of actually being a franchisee, and what that means in practice. The most useful concept to introduce here is that of the franchisee lifecycle which tracks stages of the franchisor-franchisee relationship as it develops. This is illustrated below:

This lifecycle, originally developed by the Australian corporate psychologist Greg Nathan

4, identifies six

stages of the relationship over time. The franchisee:

- Starts off happy, excited and optimistic (Glee)

- Becomes slightly less happy when money changes hands (Fee)

- Thinks their success is only down to their hard work (Me

- Wants to break free from the restrictions of the franchise system (Free

- Enters frank dialogue with the franchisor, and gets the picture from both sides (See

- Moves to a mature stage of inter-dependence with the franchisor (We)

This is helpful for both franchisor and franchisee to know, as it can de-personalise any problems and allow both parties to see developments as part of a normal cycle. It also emphasises the long-term nature of the relationship, the need for commitment, and the ongoing importance of communication between the franchisor and franchisee. If you become a franchisee, it might be worth revisiting this as time goes on.

4 You can find out more about Greg Nathan‟s work via the Franchise Relationships Institute: www.franchiserelationships.com

Page 11: SOCIAL FRANCHISING · 2019-08-22 · social franchising to date, by contrast, franchisees have most commonly been organisations. However, even within these organisations, there is

11

7) Advice and further information 10 key pieces of advice about being a (social) franchisee:

1. It is about give and take, and clear communication on both sides a selective franchisor is a good

sign;

2. It means they look for the best franchisees;

3. Franchises are like the musketeers: all for one and one for all;

4. You are a family and one brand: keep criticism in-house;

5. You get out what you put in: contribute your learning, innovation and improvements;

6. Make use of the central support: ask for help when you need it;

7. Keep a keen eye on the twin bottom lines of financial and social;

8. Stick at it and be flexible with change: it is a long-term commitment;

9. Remember this is a people business: the right people make the system work;

10. Investigate the practice and the people of a franchise, not just the paper.

Other information: At present, sourcing a social franchise is difficult, as there is no one place where such opportunities are listed. This may change as networks and associations become established, but it is currently best to do your own research online (or via particular sectors) or to contact one of the specialist intermediaries below who have knowledge of the field and of the current practitioner franchisors. Similarly, there is little support out there specifically for social franchisees; in seeking assistance, the following organisations are those with most practical expertise

- FranchisingWorks: programme using commercial franchising for social aims (employability and job creation); seeks commercial franchisees in particular >> www.franchisingworks.org

- Social Enterprise UK: conducted research into social franchising, and partnered on social franchising programme with School for Social Entrepreneurs >> www.socialenterprise.org.uk

- School for Social Entrepreneurs: ran dedicated Scaling to Success social franchising programme in partnership with SE UK >> www.sse.org.uk

- British Franchise Association: the governing body for franchising in the UK, with advice, information and links to support >> www.thebfa.org

- Community Action Network (CAN): CAN has experience from running the Breakthrough growth programme, and commercially within its staff team >> www.can-online.org.uk

- Economic Partnerships: North East-based firm which runs the European social franchising network, and works with social franchises >> www.economicpartnerships.com

- Social Pioneers: Social development agency specialising in public sector innovation and reform, and also with experience of large-scale replication projects >> www.socialpioneers.com

Page 12: SOCIAL FRANCHISING · 2019-08-22 · social franchising to date, by contrast, franchisees have most commonly been organisations. However, even within these organisations, there is

12

APPENDIX 1: CASE STUDIES The following four case studies are designed to provide real-life examples of both social and commercial (ethical) franchising, and draw out particular points of learning from that experience. They have been chosen to represent a diverse mix of experience, organisation, field of operations and learning. Key insights are drawn out in the box at the end of each page. The organisations featured are:

A) Riverford Organic Vegetables

B) School for Social Entrepreneurs

C) Aspire

D) Ben & Jerry’s (PartnerShop)

Page 13: SOCIAL FRANCHISING · 2019-08-22 · social franchising to date, by contrast, franchisees have most commonly been organisations. However, even within these organisations, there is

13

A) Riverford Organic Vegetables

Project / business overview:

Riverford Organic was founded by Guy Watson in 1986, and started with packing boxes of vegetables from Riverford, the family farm in Devon. It has since blossomed into a thriving franchise vegetable box delivery business, while the farm now also has an award-winning dairy, farm shop, meat box business and Field Kitchen restaurant.

Alongside the original farm in Devon, there are now regional farms in Cambridgeshire, Yorkshire and Hampshire, so that food can be grown and distributed locally. They endeavour for the vast majority of fruit and vegetables to be homegrown and organic.

At the time of writing, a Riverford franchise currently costs £12,500 to purchase, an initial £6,000 training fee, and an ongoing management service fee of 3% of sales (this does not include the need for van, office and working capital). Initial franchises are provided for 5 years, and there are currently several around the UK, from Devon to Sheffield, from Warwick to Milton Keynes.

Social franchisees experience: Riverford franchisees have all been individuals, and often couples; indeed, the Riverford website states that “that the added support that being part of a couple brings can help the business to grow and develop, especially in larger territories”. Most are looking for a career change or a business opportunity in an area they are passionate about. Melanie Cheung from Warwick was no exception, having switched from a career in management consultancy to change her lifestyle and have fewer long trips away from home. She learned about the opportunity with Riverford at a franchise fair and, having done her research on the model, raised the necessary finance from savings and family. She was attracted not only by Riverford‟s proven model and reputation, but also by the fact that the model involves meeting customers every day and receiving direct feedback. The main challenges for Melanie have been finding reliable drivers, keeping the business rolling along through hard winters, and balancing the competing demands with her family life. Her broad business experience allowed her to keep all the other aspects (accounts, sales, marketing) running well, which has led to a thriving franchise over time. There are often long hours required, but Melanie is an example of a franchisee with both a strong support network and significant individual commitment. Both are key foundations of her success and the success of the franchise.

Please visit their webpage at: http://www.riverford.co.uk/

Key franchisee insights:

- Source franchise opportunities at dedicated shows and fairs

- Support networks are important for the lead person in a franchise

- The customer is always king: even more than the franchisor

- A breadth of business experience can help with franchise operations

Page 14: SOCIAL FRANCHISING · 2019-08-22 · social franchising to date, by contrast, franchisees have most commonly been organisations. However, even within these organisations, there is

14

B) School for Social Entrepreneurs (Liverpool)

Project / business overview: School for Social Entrepreneurs (SSE) was founded in 1997 in East London, and runs year-long programmes of training and support for social entrepreneurs. It aims to develop the individual and their project in combination, based on specific elements and an action-learning (or learning-by-doing) approach. Social franchisee experience: Having run its original national programme for three years, SSE was funded to run twelve time-limited year-long programmes in twelve locations around the UK. This provided „proof of concept‟, and SSE then began to franchise, starting with Fife, Belfast and the East Midlands. As part of its strategy to establish an SSE franchise in each English region (and Scotland, Northern Ireland and Wales), SSE started to investigate potential partners in the North-West; specifically in Liverpool. It talked to a number of potential franchisees, whilst negotiating with Liverpool Council for start-up investment. None were the right fit culturally or in terms of skills until the Council suggested Blackburne House as the potential franchisee. Blackburne House were already an accredited learning provider (Beacon-status college), a thriving social enterprise and, alongside that combination of education and enterprise, had first-rate networks in the city and region. From their perspective, they saw bringing SSE to Liverpool as good for profile, complementary with their other activities, and in-line with their mission (with potential to expand their social impact). Crucially, for both parties there was also a good cultural fit, with strong and transparent relationships from the off. Blackburne House also asked a lot of questions about the model, and went in-depth with SSE-UK staff about all the issues connected to being a franchisee, before committing and signing the franchise agreement. They also paid particular attention, based on their own experience and that of SSE-UK, to who ran the programme within Blackburne House. Sylvia Pearson, with her expertise, networks and passion for enterprise, and clear communication, has proved to be an excellent choice. Since starting in 2006/7, SSE Liverpool has become one of the most successful SSE franchises, branching out geographically (to Merseyside and Wigan & Leigh), thematically (running the first dedicated SSE environmental programme) and trialling new innovations (as with its work in schools) with ever growing numbers of social entrepreneurs. SSE-UK has shared the learning from these with its wider network.

Please visit their webpage at: http://www.sse.org.uk/school.php?schoolid=5

Key franchisee insights:

- Be prepared to wait and test the relationship fit

- Ask as many questions as you think necessary before signing

- The person leading the franchise is crucial

- Pilot new innovations but keep communicating with the centre

Page 15: SOCIAL FRANCHISING · 2019-08-22 · social franchising to date, by contrast, franchisees have most commonly been organisations. However, even within these organisations, there is

15

C) Aspire Project / business overview: Aspire was set up by Paul Harrod and Mark Richardson in 1998 in Bristol to produce a not-for-profit fair trade catalogue which was distributed by homeless people, who would return to collect orders. The focus of the organisation was to provide full-time employment that moved the homeless away from benefit dependency; to this end, the homeless people were guaranteed a wage based on the hours they worked (not the sales they gained). Initial sales were strong and local support and media coverage helped establish the business. After a year of operations, Aspire had attracted 4000 customers, generated £150,000 and employed 15 staff; it was not profitable, but self-sustaining. Social franchisee experience: The Aspire model rapidly attracted a lot of attention, from government and funders. The founders decided that Aspire needed to grow to achieve necessary economies of scale, and drew up an ambitious franchising strategy in July 2000: this aimed to establish 30 outlets by the end of 2003. £400,000 funding was secured, and Aspire Group established to lead the franchising operation. The business expanded rapidly, and nine franchisees, most embedded in existing charitable organisations, were selected and in place by September 2001. This soon grew to 12 franchisees, employing 300 homeless people and with sales of £1.3 million. Franchisee selection was swift, and franchisees were allowed to interpret the business model in different ways. As has been detailed elsewhere many times, challenges soon became apparent (highly seasonal business, huge support needed for the homeless people, small market). Franchisees started to lose money, now that it was clear that the business model of the business was largely unproven. Several franchisees started ancillary businesses to earn money, and relationships grew more strained when the central franchisor started an independent direct mail business. Some franchisees viewed this as blurring key elements of the franchise (agreement), such as the geographical boundaries. Despite further investment, and changes to the business model, Aspire Group gradually declined and by 2004 the business had folded. It should not be overlooked that the founders (both very young at the time) and the franchisees achieved a great deal of social impact in this time; indeed, several continued to work in homelessness. And, though the franchisor subsequently received much of the blame, franchisees have a responsibility to do their own due diligence on the model, the franchise and its viability.

Please visit their webpage at: http://www.aspire-foundation.com/index.html

Key franchisee insights:

- Due diligence is as crucial for the franchisee; the responsibility is two-way

- Franchising is a long-term deal; rapid growth may not be a sign of success

- The model needs to be proven, in terms of finance and social impact

- Strong brand and profile is important, but not the only criterion

Page 16: SOCIAL FRANCHISING · 2019-08-22 · social franchising to date, by contrast, franchisees have most commonly been organisations. However, even within these organisations, there is

16

D) Ben & Jerry’s PartnerShop

Project / business overview:

PartnerShops are franchised Ben & Jerry „scoop shops‟ (the retail arm of the ice cream company) run by non-profit organisations. They are provided at a „preferential‟ rate to social enterprises and charities in the US and UK, in order to help get long-term unemployed people back into employment. By offering jobs and entrepreneurial opportunities, Ben & Jerry‟s have sought to utilise their commercial business for social and community benefit.

There are 15 PartnerShops in the US, with the first having started in 1987, following an idea from the head of franchise development. There are currently three shops in Ireland, with franchises also having been run in Chester and Aberdeen.

Social franchisees experience: Franchisees have included a range of youth, employment and community organisations, from YMCA to the Chicago Children‟s Choir. The „preferential‟ franchisee deal they receive is to have their fees waived, have cheaper product costs, and to get additional support from the centre to help with operations. The most successful UK-based franchisee has been the Cresco Trust which runs PartnerShops in Derry and in Belfast, having started as a partner in 2005. They were selected as a local social enterprise with significant experience in community regeneration, and in helping those who are disadvantaged from the labour market and struggling to get into employment. Central to the success has been the solid foundations of the organisation, its excellent local networks and its credibility and experience in the field of employment. Also of note is that its Derry franchise has gained additional funding from Derry City‟s Council Local Strategy Partnership, which might suggest that the pure business model does not solely provide enough resource to achieve high quality training and support of the young unemployed people (when the commercial location does not provide enough income). This is borne out by the experience of the Furniture Resource Centre (FRC), a Liverpool-based social enterprise, who took on the first international Ben & Jerry‟s franchise having seen the Juma Ventures franchise in San Francisco in action (which trained up homeless people to get them into employment). The FRC experience in Chester, as outlined on their website, was that there were substantial fit-out costs, and that there were significant trading losses. Both of these, in FRC‟s view, made the business plan unachievable, despite the clear benefits to the young people involved. Currently, Ben & Jerry‟s are taking no new franchise applications, but are continuing to support existing franchisees and to develop their work in job training.

Please visit their webpage at: http://www.benjerry.co.uk/onlinescoopshop/

Key franchisee insights:

- Taking on a commercial franchise is a valid possibility to achieve social aims

- Local networks, credibility and experience can prove invaluable

- Additional resources may at times be needed to make the model work

- Learn from the experience of other franchisees

Page 17: SOCIAL FRANCHISING · 2019-08-22 · social franchising to date, by contrast, franchisees have most commonly been organisations. However, even within these organisations, there is

17

Acknowledgements: This manual was developed by Nick Temple, with editorial management by Craig Carey, Holly Brereton and Samantha Raoult. We would also like to thank the organisations who generously contributed their stories and knowledge to this manual, including: Riverford Organic Vegetables, School for Social Entrepreneurs, Aspire and Ben & Jerry‟s PartnerShop. Social Enterprise UK is the UK membership organisation for social enterprise, a growing movement of businesses that exist to change the world for the better. Our members include start-ups, micro-enterprises and large, well-established social enterprises together with public sector and private sector organisations supportive of social enterprise. As well as representing our members‟ interests at national level, we carry out research, share information and news, advise government, public and voluntary sector organisations and provide practical business support for social enterprises. CAN Mezzanine, 49-51 East Road, London N1 6AH Email: [email protected] Web: www.socialenterprise.org.uk

Published October 2011

Social Enterprise UK


Recommended