Definition

What is Microfranchising?

Microfranchising is a development tool that seeks to apply the proven marketing and operational concepts of traditional franchising to small businesses in the developing world. The primary feature of a microfranchise is its ability to be streamlined and replicated. The businesses are designed for microentreprenuers and usually target development issues such as health, sanitation, and energy.

One of the first publications on microfranchising provides some additional definitions of microfranchising.

As an illustration consider a microcredit borrower who is not particularly gifted as an entrepreneur. With the option of a microfranchise they could get a loan from a microfinance institution along with a 'business in a backpack' and therefore gain access to an entire system of training, support, branding, and marketing as a franchisee. The franchisor would operate with the efficiency of a McDonalds or Subway and subsequently drive prices down and increase distribution of essential products and services. Most microfranchises have the ability to provide additional employment to a handful of people beyond the franchisee which could potentially be the poorest of the poor.