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Getting Social

Curing the world's ills using franchising and IFA resources



Members of the steering committee and guests, front row, l to r: Michael Seid and Marla Rosner, MSA Worldwide; Beth Brody, Faegre Baker Daniels; Judith Thorman, IFA. Back row: Scott Hillstrom, HealthStore Foundation; Julie McBride, PSI; Eric McCarthey, former executive with Coca-Cola; James Ayers, PSI; and Aaron Chaitovsky, Citrin Cooperman.

Not every company that joins the International Franchise Association is privy to members of a sanctioned task force sitting down with it for a day to help improve its franchise operations. But PSI (Population Services International) is a special member.

As the largest social-sector franchisor in the world, PSI became a member of IFA after meeting the task force’s chair Michael Seid of MSA Worldwide at the First Global Conference on Social Franchising, last November in Mombasa, Kenya.

This subsequent meeting, held at IFA’s headquarters in Washington, D.C., at the end of March, was just as much an exercise in finding the task force’s direction as it was assisting PSI.

“We started the task force with the premise that we knew all the answers without asking the questions,” said Seid, who in addition to being a franchise consultant is the chief concept officer for CFWshops and is on the board of its parent company, the HealthStore Foundation, which franchises health clinics in Africa. “The best definition I have is that social-sector franchising is a form of franchising, based on business-format franchising techniques and principles, adapted for use in the not-for-profit emerging markets.”

The task force numbers around 40, but a core group is leading the charge. It is still attempting to define and refine a style of franchising that is on the upswing, not only in the United States, but internationally, as well.

It’s not enough to say that in order to qualify for the social-sector distinction the franchisor doesn’t make a profit. “A lot of franchisors can claim that,” one task force member quipped.

In the last few months, two other social-sector franchises have joined IFA: London-based Marie Stopes International (MSI), a network of 1,000 franchises that deliver reproductive health services in under-served areas of Asia and Africa, and the PharmAccess Foundation, a Dutch not-for-profit organization working to improve health systems in Sub-Saharan Africa.

A health-care worker at one of Population Services International clinics in Rwanda counsels a young mother on birth control options.  Photo courtesy of PSI.

PSI was founded in the 1970s as a social-marketing organization to make family-planning products available to the poor, according to Julie McBride, technical advisor for the Washington, D.C.-based organization. Its 24 franchises operate under 15 different brands in 23 countries in Asia, Africa and Latin America. Its approximately 10,000 franchisees serve 10 million clients a year, she said, and plans are in the works to expand their network to more countries and scale up its already existing operations.

 “We’re doing a good job,” she told the group, “but we feel like we could do an even better job.” Hence the meeting.

One of the challenges of being an international company with units in multiple countries is that the brand often changes to suit the local culture. PSI may have different brands, McBride said, but primarily the same products to tackle the issues of HIV prevention and maternal/child health issues.

Not all of their brands are franchised. The idea to franchise certain services came about, McBride said, when they wanted to add IUDs to their birth control options and providers of the service needed to be both trained and to adhere to strict guidelines. How did they go about researching the franchise model? By looking at what McDonald’s does, she answered.

PSI’s franchise model is a “business within a business,” she said, with franchise agreements with pharmacies or clinics to sell their products.

“Think of a cosmetic counter in a department store and you’ll get what they do,” Seid said, admitting it was not meant to be an apples-to-apples comparison. McBride has been charged with producing what she referred to as a business in a box. Country reps are juggling too many balls, she explained, and they welcome more structure.

Like many companies, PSI expanded rapidly to meet the demand.

“We started as a condom company in Africa,” said James Ayers, senior global social marketing adviser. HIV and AIDS were at epidemic levels and “we needed cowboys to get the job done quickly. It was a crisis.”

Now the world—and distribution of health products—is much more complicated, and they need fewer cowboys and more “Indians,” people who will follow the chief’s instructions.

One of the interesting dilemmas social sector franchises face, at least in PSI’s case, is that they are asking franchisees “to  do more work to provide a product that a poor person can afford,” McBride said.

A naive person may wonder why the franchisees don’t just absorb these extra costs or willingly spend the extra time getting trained, but as task force member Aaron Chaitovsky of Citrin Cooperman pointed out, making money in these countries is often a matter of survival. The not-for-profit is the franchisor, not the franchisee.

The right place, right time

PSI met the task force at a fortuitous time. Although McBride is not reinventing the wheel, she welcomed insight on the best way to revise the documentation.
Advice the task force supplied included:

•  Fine-tune your global brand promise down to what the customer should feel when in your establishment. “Start with one page then cut it to half a page and then to two sentences,” suggested Eric McCarthy, a former executive of Coca-Cola, who was serving as the moderator. “Then if you’re really skilled, put it into two words.”

•  Establish what are the nonnegotiable standards.

•  Develop an economic plan to match up with those nonnegotiables; for instance, if sterilization of instruments is required, source equipment that is affordable.

•  Have a clear message of how the franchisee will profit from joining the PSI family.

“You have the opportunity of a lifetime to have this quality of help,” Scott Hillstrom, chairman of the HealthStore Foundation in Minneapolis, told McBride.

And IFA has an opportunity of a lifetime to help social-sector franchisors take the very best of franchising to developing countries.