Monday, May 07, 2007

Who should be interested in Microfranchising?

This post also comes from my conversation with Steve Gibson. He thinks microfinance institutions are in a perfect position to expand to microfranchising. The loan officers would be their eyes on the ground to report the most successful or innovative businesses from their borrowers. The MFI could then approach such individuals and see if they are interested in franchising their business model and then the MFI would act as a business incubator to refine the systems of the business and then in a venture capital role to loan larger sums that would be neccesariy to take an informal market business and brand it, steamline it, and replicate it.

The other party that should be particularly interested is an multinational corporation interested in moving a product at the bottom of the pyramid.

I think social venture firms such as The Acumen Fund or Good Capital have already demonstrated that they like the idea of microfranchising by supporting such groups as Scojo.

I think individual donors would also like the idea of microfranchising. Both Kiva and recently acquired by Google, Microplace have indicated that they hoped to eventually offer small returns for lenders. Would a lender be more confident in lending to a woman starting a business herself or a woman who wants to purchase a franchise? The branding and knowing there is training and systems behind a microfranchise I think lenders would feel more confident lending to a microfranchisee.

3 comments:

Siva said...

Microplace was acquired by EBay and not by Google.

David Stoker said...

Yes, correct, my mistake in a quick post.

kevin jones said...

we think there's a lot to like in oneroofs franchise model. it's the replicability of franchising that makes it work, more than it's size. the micro part of the equation just points to its downward scaliability, if you will.