What Is Microfranchising?

David Stoker:

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.

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 ‘biz in a backpack’ and therefore access to an entire system of training, support, branding, and marketing as a franchisee.

The franchisor would operate with the efficiency of a McDonald’s 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.