Thursday, May 10, 2007

Definition Clarification

I have recently had the opportunity to get a sneak peek at the first major publication on microfranchising that is coming out in July. I thought I would pass on the authors' definition of microfranchising as the definition page is one of the most frequented on this site. Some quotes:

“The underlying intent of a microfranchise is to alleviate poverty through the creation and provision of sound, proven businesses that will in turn increase the earning potential of the microfranchisee. Microfranchises are independently owned and operated; thus,they create income for the individual owner and the owner’s employees, while simultaneously providing needed goods and services at an
aordable price.”

“the “micro”in microfranchising stands for more than mini or small.“Micro”is essential to microfranchising and in this sense has a social connotation that refers to grassroots bottom-up
initiatives, poverty alleviation, benevolence, base ofthe pyramid,and the like. “micro”also represents
sustainability. Thus, microfranchising can be thought of as poverty alleviating, social, grassroots, BOP, benevolent,and barefoot franchising.”

“The franchise in microfranchise represents replication to scale. This involves systematizing an operation, paying close attention to each and every aspect of a business until it is a turn-key operation, then replicating it to scale. Franchising embodies the concept of granting the right, privilege, or access to a proven business system.”

“The marriage of the two terms makes up microfranchising, which is indeed very different from franchising. For example,in traditional franchising, the purpose for establishing a franchise is to grow one’s business quickly in order to increase profits. In microfranchising, the focus is more on the microfranchisee and how he/she benefits from buying into a proven systematized business. A microfranchise is established to assist the poor in creating a sustainable income through owning
and operating their own business. The reduction of risk, provision of specific training, ongoing mentoring, and reduction of creative burden are all benefits to the microfranchisee.”

The book goes on to discuss the theory of microfranchising, potential business models, case studies, financing tools, and a concluding outlook to the future. I look forward to discussing the ideas in the book after its release.


Business Professional said...

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Anonymous said...

Very thorough a definition, till this point I mainly associated the micro with the size of the of most micro-franchise businesses.