European Social Franchising Expert Seminar April 2011, Genoa Italy

Transcription

1 European Social Franchising Expert Seminar April 2011, Genoa Italy

2 Expert Seminar Key Findings Social enterprises and social franchisors (SF) are value-based businesses, which combine the responsive and entrepreneurial abilities of private enterprise with the social values of the public and charitable sectors. Franchising for social enterprises is a relatively new concept that needs support and encouragement. When looking closer, there are many subjects to address and a lot of issues to handle. We are in the firm belief that social entrepreneurs can succeed with his/her business idea and with their methods of developing the people within his/her organization, but we also want to stress the fact that running a social franchise business successfully needs in many situations a new approach. The condition for SF is a mix of being in full competition with their products/services and at the same time replicate, while not forgetting its social responsibility. Our pre-study of SF in Europe reported that there are more than 6000 people, probably more than employees in the Social franchise branch today. The industry is rapidly growing; the majority of SF has established franchisees during the last three years. The expert group agreed upon the follow main areas for success; There are many similarities between social franchising and "ordinary " franchise. We compete in the same market with many of the same conditions: A proven and replicable business idea and financial strength for reliable endurance. In addition, we all agreed that we must keep in mind that we are focusing on social goals. We must never deviate from our mission. A rooted and embedded network is an important success factor for long-term stabile and secure development. To further develop a strong cohesion within the social franchising will increase the opportunities for the industry to grow. The meeting showed that there are common denominators that can be solved in a network. Since one can assume that we are facing a major expansion of SF in Europe, there are many reasons to further strengthen and develop specific meeting places. Welcome and introduction to the meeting Introduction to The Network for the Better Future of the Social Economy and European Social Franchising Network (ESFN) by Sven Bartilsson and Keith Richardson. Sven Bartilsson greeted everyone warmly welcome and looked forward to a fruitful meeting of experts on Social Franchise. The aim of the meeting is, on the basis of participants' expertise, to discuss the establishment of a network of organizations working in the area of Social Franchising in order to facilitate the development of SF in Europe. The meeting will also bring together the knowledge from SF and give input to the recommendations in the BSFE Learning network. SF should also be seen as a tool for governments in their efforts to offer good jobs and healthy companies for people with special problems who have difficultes when entering the labor market. 2

3 There is a growing market of good projects and know-how, it is a question of financing and bringing it out on the market. Finding the method and the model to spread and replicate. We see a need of guidelines in order to help the branch. (Nina Leseberg from Bundesverband Deutscher Stiftungen) Presentation of the European Directory of Social Franchisors, key findings of the research. On behalf of BSFE we have performed an extensive survey of SF, on what theirs needs are and which challenges they are facing. Keith Richardson reported: The survey is designed to identify networks and social enterprises/sf that exists today in Europe. The aim has been to obtain a basis for the status in the industry. In which industries are SF established? Needs and priorities, are there similarities between SF companies in how to address the problems? The aim is also to measure the impact SF does on the European market. We must remember that the investigation so far is based on the number of SF in various ways known to us. There are probably still a large number of SF in Europe that could be included in the database. In order to make the information more reliable, it is important that we constantly look for more SF to form a clear picture of the industry. Social Franchisors in Europe: UK National Community Wood Recycling Project, MyBnk, Bikeworks, Riverford Organics, Ex-cell solutions, Ethical Property, Princess Royal Trust for Carers, Participle, Big Issue, Foster Care Cooperative, My Time CIC, Bio Regional, The Big Lemon, Household Energy Services, School for Social Entrepreneurs, Brighter Futures, Green Works, Fruit to Suit, Health Exchange, Future Clean, Friends of Farmers Markets, CASA, Green Gym, Law for All, Pack-It, Big Green Valley, Aquamacs, H2oPE Italy Consorzio Pan, Atlantide, Comunita Solidali, Le Mat Sweden Friskis & Svettis, Villa Vägen Ut, Le Mat Germany Cap Markt, Dialogue in the Dark, Balu und du Notinsel, Miniphaenomenta, Lifeguide Denmark Specialisterne France 3

4 AETES Environnment, Energies Alternatives, Optimomes Belgium Komosie, Groep INTRO, Fietsenwerk N lands Fietspunt Poland Barka, Flandria Portugal Empowerment Gateway What do SF do? Which industries do they work in? Recycling 17% Social Work 13% Leisure / Tourism 13% Energy 13% Food & 13% Horticulture Social Care 8,5% Transport 8,5% Education 8,5% Child Care 4% Health Care 4% Offender Management 4% Facts and Figures 6,000 plus employees Average 55% disadvantaged in the organisations Total turnover 184 million 90% of the companies provide services 275 social franchisees 60% companies established in 2005 or later 65% first developed first social franchise after % developed social franchise without external advice/support 80% received external funding 60% development funded by ESF 60% charge a a start up fee 15,000 euro average fee Largest fee 50,000 Average cost of start up is 160,000 Range 3,000 to 750,000 90% make on going charge Most common % of turnover 1-10% 4

5 What kind of external help do the franchisors need? Workshop on success factors of social franchisors. A workshop was conducted in order to tap the expert knowledge of success criteria for the establishment and development of social franchising. The workshop was performed according to the Opera model where small groups litigate the essential concepts to the next step, discuss them and find solutions to possible problems. Below are the group s keywords and results of discussions on key concepts. 5

6 The success factors of social franchising: Proven and replicate social business A well developed Business idea Tested/proven concept that works in other regions as well Be able to provide a business in a box Sustainability Market needs combined with a business plan Slow to grow approach to a sustainable model Rooted Resources Mission Mutuality Strong network of franchisees and local partners Local network; Social and Economic organization Support structure to handle complicated puzzle Enough resources (finances, people) Sustainable finance model To find the right franchisees Always retaining the integrity (no mission drift) A convincing narrative that links values and objectives to means Social entrepreneurs, not social workers a belief in the market Low competition between members, F has his own working areas Franchisor/franchisee Mutual benefit, strong support chain. Good understanding between the franchisees 2. The expert group agreed upon continue to exam the following main areas for success; Rooted, embedded network Determining shareholders, clear roles, dialogue between franchisor and franchisee has to be developed in an early stage. Community involvement is important, use existing network and establish new networks. Franchisor has to help open doors for franchisee. Network between franchisees to transfer knowledge and experiences. Important that the same values and messages/stories carrying the values is consistent in the network on every level. 6

7 Proven replicable business idea The picture shows the aspects of a proven business that the franchisors must have developed and the tools and process that is developed in the replication process. The franchisor has to develop services and to determinate the role of the social values and how the social aims should be fulfilled. Normally are the social goals not the key factor for success in the marketplace. Resources Sustainable finance model(s) must be developed by each social franchisor. Models for social franchisors growth must be developed and spread. These could be combinations of traditional finance tools, public fundings and alternative financing tools. We don t know in which ways loans? Equity? boot-strapping? Grants? are used. Strategy for European SF network or National SF network: has to be developed for improving finance opportunities Raising awareness among Finance institutions, banks, and foundations about the opportunities of SF. Mission keep in mind that we are focusing on social goals Keeping true to your missions is a matter of continual difficult judgement, especially in hard times. Insist on your own bottom line/minimum package. Set the terms of trade (social clauses etc.) Search for entrepreneurship, not community development don t set up people to fail. The franchisor has a responsibility. 7

8 Do R&D! Link to social innovation Mutuality (understanding in competition) Discussion Social franchising allows social enterprises to retain their local roots and be effectively governed locally without loosing the benefits of scale and political influence that larger organisations often have. Social franchising makes it much easier for social entrepreneurs to be individuals or existing social enterprises wishing to grow in new markets. They provide a credible and proven business model, practical support from people who have run the business and access to training and a range of other expertises and resources. The expert group addressed the problem that the nature of SF is in many cases to grow slowly, meaning in a stabile and organized way. But the pressure from banks and risk capitalists and sometimes the market, forces us to grow quick and then we risk to sell know-how, which is not proven. The pressure and demands can also come from the franchisee. It is important to have an approach that promotes the SF group to develop together in order to avoid that the franchisees take there know how and leave the franchisor. That situation can be avoided by an umbrella organisation, where common issues to create an open climate and where the franchisor can have an open discussion with the franchisee. The key roles for European Social franchise network. The participants agreed on the importance of having a common organization to develop and protect SF interests. A federation of the social franchisors in a 8

9 common organisation can potentially allow SF to compete with large public and private sector providers, which otherwise might be impossible. Establishing a sector organization to share common problems, solutions and exchange knowledge is interesting for the social franchisors. The expert group agreed upon that it is also important to have a network when people look for inspiration and knowledge on how to expand their business, financial issues, sharing information, training for franchisees, benchmarking/mentoring, shared learning etc. It is important to feel that you are a part of something bigger than just your own company. Maybe someone else in the network has the answer to your questions! The last issue discussed at the meeting was the question of the future work; is there a need for cooperation, a network or organization of social franchises in Europe? What need is there among the franchisors? The group agreed that there is a need for networking in order to strengthen our positions. But networking also expands the possibilities of using common knowledge and exchange experiences. Many expressed the need for benchmarking; an organization can protect interests and pay an impact on governments (if needed) "together we are big and strong, " together we can attract R & D money! Other areas where cooperation plays a vital role; search for new agents, matchmaking of SF within the countryside as well as in other countries in Europe Future work and next steps Social franchising is at an early stage of development and this meeting has addressed a number of issues that have not yet been resolved, but need to be considered when setting up a social franchise organization. This further emphasizes the importance of a network in which each organization can draw strength and knowledge of how others have solved problems and addressed situations. To further develop a strong cohesion within the social franchising sector will increase the opportunities for the industry to grow. The meeting showed that there are common denominators that can be solved in a network. Since one can assume that we are facing a major expansion of social franchisors in Europe, there are many reasons to further strengthen and develop specific 9

10 meeting places for SF firms. There is a proposal to organize a meeting in London this fall. The purpose is to invite all SF firms that participate in the completed survey. This is to provide a venue for exchanging experiences and supporting the development of entrepreneurs. The meeting recommended investigating the possibility of inviting players that could be interesting for the industry, lawyers, banks and franchisors in other industries, researchers in the topic. The work has to take in consideration the processes and actual initiatives within the EC. The Social Business Initiative in DG Market is an example of where the work of BSFN can contribute with input. Short demonstration of the ESFN website under construction at The delegates had a short discussion on layout etc. The changes will be implemented as soon as possible. 10

11 Appendix List of participants at the meeting in Genua. Participants Pernilla Svebo Lindgren Keith Richardsson Mike Berriman Sven Bartilsson Renate Goergen Werner Block Nina Leseberg Barbara Sadowska Jürgen Blondeel Jos Vandikkelen Giovanna Maranzana service.it Toby Johnson Christina Byström se Linda Rutter Lynn Summerside Organization Vägen ut kooperativen and Le Mat Sweden CORE, UK Economic Partnership and Common Wheel Coompanion & Le Mat, Sweden Le Mat, Italy GDW SÜD (CAP), Germany Bundesverband Deutscher Stiftungen, Germany Barka Foundation, Poland Komosie, Belgium Fietsenwerk, Belgium Cooperativa sociale Villa Perla Service Italy Aeidl Coompanion, Sweden (documentation) Sustainable Enterprise Strategies, SES, UK Sit N B Fit CIC, UK 11