MicrofranchisingUsing traditional franchising concepts for microenterprise in the
developing world. |
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Barefoot Franchising
Microfranchising is an effective tool for helping the world's survival-focused ultra-poor who earn less than $2.00 per day. These people struggle to repay even small microloans and have no buffer in times of crisis. The main advantage of this system is that it uses a standardised microenterprise - franchisees simply follow a series of prescribed steps to set up and run their own profitable microenterprise. They also gain economy-of-scale pricing benefits and access to distribution networks which they wouldn't have as independent entrepreneurs. Because the microenterprise's profitability is tested first, it's adapted to the local context. For those living below the poverty line, microfranchising offers a low-risk opportunity compared to starting a new enterprise in a saturated market. Franchisees don't need formal education, entrepreneurial skills or business ideas. Most importantly, microfranchising empowers the ultra-poor to become business owners instead of aid recipients. |
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