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Micro-franchising is not just a subset of franchising. In fact, can be a key trigger to reduce poverty and provide entrepreneurship opportunities to the less privileged in rural areas, by Ankit Sachdeva
As per the poverty level statistics of 2005, nearly 50% of the world’s population lives on USD 2.5 per day and about 80% of the population lives on less than USD 10 a day. These numbers, while astounding, clearly show how true development will only become a reality once the poverty-stricken are uplifted. It is also evident that entrepreneurship is one of the most ideal means for
Micro-franchising, a subset of franchising, is a model where the focus lies on not only expanding the business through replicating it but also cater to the socio-economic development of the micro-franchisee and its community. These are small-scale, sometimes single person, franchises which distribute standardised and branded products and services. While it gives young, energetic entrepreneurs a chance to start a living of their own without having much experience or capital, it gives large-scale brands an opportunity for expansion into rural areas and ‘hard to reach’ customers without having to worry about delivery costs and low purchasing power.
Some key examples from the world of micro-franchising are:
*9,000 micro-entrepreneurs in Bangladesh, El Salvador, India and South Africa diagnose minor eyesight problems and sell affordable reading glasses to rural communities. Basic training in optometry and glasses are provided by VisionSpring, a social enterprise that acts as the franchisor.
*In Assam, micro-entrepreneurs equipped with a net book, wireless internet access and a fingerprint scanner provide basic banking services to villagers. Drishtee, a social enterprise, trains the entrepreneurs, provides the equipment and the processes in cooperation with a large Indian bank.
*More than 45,000 women throughout India sell Hindustan Lever’s soaps and shampoo in their local villages in a franchise-like model named ‘Project Shakti’. Hindustan Lever, Unilever’s Indian subsidiary, provides training in selling, commerce and accounting to empower these women to become micro-entrepreneurs.
THE RIGHT CHOICE
Micro-franchising for developing countries can be a boon to provide for employment to a large population and add to the development of individuals and the country. Micro-franchising is in no way a ‘fire and forget’ rocket; it needs constant support and maintenance. But given the right resources and managed well, building up a micro-franchising network might pay off in the future – a great brand among the rural population with legions of loyal customers and knowing that one probably helped hundreds or thousands of families to take their first step towards a better life by giving them the opportunity to become an entrepreneur.