MicroFranchising

I spent Thursday and Friday in Park City at a learning lab sponsored by the BYU Center for Economic Self Reliance on Microfranchising.

Microfranchising is utilizing the franchising model in a scaled down model to help the poor have sound business opportunities.

It is proposed that MicroFranchising would solve the following problems in the effort to the effort to increase economic self-reliance among the poor:

1. Not all entrepreneurs have tools needed for success.

2. Not all people have an entrepreneurial spirit and would be better suited as employees.

3. MicroFranchising is an efficient method for the delivery of services to the poor.

So the concept is - build a very simple business, get the processes down flat, make sure it is a profitable business model, find a way to make it replicatable, and then find a way to roll it out.

Grameen has done this in sorts with their Village Phones:

- Grameen Bank provides microloans to women in rural Bangladesh to purchase a "Village Phone"
- Grameen Telecom administrates the village phones
- Village Phone is available to anyone in the village who wishes to make or receive a call
- Current, more than 55,000 phones are in operation
- Impacts:
1) Franchisees earn a sustainable income
2) Rural Bangladesh is connected to rest of world

This is how it works financially:

- Franchisee is given the phone and equipment (US$220) - must be repaid to Grameen through weekly installments
- Franchisee pays minimum monthly rate (US$3) and then a per-minute
- Users are charge variable per minute rates depending on time and location
- Average net income for franchisee is US$50-100/month

It seems like this could be another tool in the toolchest in how to fight poverty.