Changing the world, McDonald's style: 5 great social franchises

Social franchises – businesses with a charitable purpose – develop and market cheap, innovative products that solve a social problem. Here are five examples.

Packaging for Plumpy'nut, a high-energy peanut paste, is seen on the production line at the Nutriset factory in Malaunay, France. Plumpy'nut has provided a huge leap in the fight against hunger in the developing world because infants can eat the sweet-smelling paste – with all the nutritional value of milk formula – at home rather than in a hospital.

Social franchising is a big deal, recently called the future of social enterprise and even "the solution for U.K. unemployment."

While these claims might be a bit overstated, social franchising works. The best examples come from sectors as diverse as nutrition and sustainable energy, but they all share common threads:

There’s usually an existing market failure, a simple business model that can be used over and over again, a partnership between transnational and local NGOs, and – ultimately – a cheap, innovative product or process that does what the market didn’t.

Global Envision has covered a number of franchises in the past. Here’s how our five favorites work:

Tiendas de la Salud, Guatemala
With expertise from Mercy Corps and money from the Linked Foundation, a pilot project brought 36 franchised stores to rural Guatemala, where 53 percent of the population lives in poverty. The stores provide affordable generic medications where health services are otherwise nonexistent. The business model has been so successful that it was purchased by local commercial pharmacy chain Farmacias de la Comunidad, which has plans to expand the project to rural areas across the country.

Read more here.

Nutriset, France
Founder Michel Lescanne had already revolutionized malnutrition treatment with Plumpy’Nut, a peanut and milk product that would allow patients to regain strength and recover at home rather than taking an expensive and often lengthy trip to the hospital. Taking a cue from McDonald's and Coca Cola, local manufacturers and distributors get the product to their markets, and Nutriset collects a royalty fee. This keeps Plumpy’Nut cheap, while Nutriset gets paid so they can do more research.

Read more here.

The HealthStore Foundation, Kenya
In 2000, Scott Hillstrom and Eva Ombaka set up a network of microfarmacies and microclinics to combat a host of treatable diseases accounting for 70 to 90 percent of all childhood deaths in Kenya. These franchised Child and Family Wellness Shops provide both essential drugs to treat infectious diseases and basic medical services, allowing them to reach more than 2.5 million Kenyans by turning nurses into entrepreneurs.

Read more here.

KeBAL food carts, Indonesia
A new food cart franchise is battling malnutrition in Jakarta, Indonesia. Mercy Corps teamed up with Dutch nutrition company DSM and Rabobank to develop street food that kids would enjoy while providing missing nutrients, supplied as an added mix by DSM. Initially piloted in 2009, the social franchise is working toward financial sustainability while exposing DSM to the massive base-of-the-pyramid market in Jakarta.

Read more here.

Husk Power Systems, India
Husk Power has been quietly leading a green revolution in India with its biomass-powered microgrids, which have already served over 200,000 customers. Backed by Acumen Fund, the group hopes to reach 5 million people over the next five years, providing a credible solution to India’s vast power needs. The key to its success? Developing a cheap generator that local franchisees can use to power a miniature grid for their village. To provide a cheap source of fuel, the generator runs on biomass waste that abounds on Indian farms.

Read more here.

This article originally appeared at Global Envision, a blog published by Mercy Corps.

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