What is micro-franchising?
Micro-franchising provides easily replicable enterprise opportunities with proven operational models that have potential to help alleviate poverty, enhance individual economic self-reliance, and stimulate individual, local and national economic development. Micro-franchising is a way of downscaling the concept of traditional franchising, in which a franchisor, or parent organization, manages and supports a network of franchisees operating a common business model that has already proven to be successful. The franchisee has accountability to the franchisor and in return, the franchisor provides the opportunity for full ownership and provides training and other embedded services and support that can enhance business operations, as discussed in further detail below.
Could it be applied in Jordan?
Yes! Despite global success, micro-franchising has not yet reached the Middle East. Jordan has the opportunity, as a pioneer in the region, to pilot and roll out a model that can then be adapted and replicated across the region.
Within the challenging context for micro-enterprise and employment in Jordan, micro-franchising could be an effective tool for enterprise development through a creative “win-win” structure. This will allow the franchisor to become more scalable or gain access to new markets, while linking and supporting micro entrepreneurs in underserved communities to provide critical products and services.
International micro-franchising models can be replicated in Jordan as an acceleration mechanism, but the model must be localized to the Jordanian context, and must be localized to meet supply and demand drivers.
Immediate opportunities for franchising are prevalent upstream – specifically in food processing – with significant employment benefits expected among women and youth. In several governorates, readiness is most evident in relation to agribusiness production, inputs, raw materials or processing.
USAID LENS Work
In 2017 USAID LENS carried an assessment of micro-franchising as a potential tool for social and economic development in Jordan. Following up on the assessment, and to test and validate the feasibility of micro-franchising as an economic development tool in Jordan, USAID LENS designed and launched three pilot projects with partner micro-franchisors in different sectors and value chain functions. The goals of the pilot activities are to:
- Select and design projects along different parts of the value chain
- Qualify and quantify what it takes to create a successful franchise
- Validate sustainability and scalability of the model design
- Validate success and risk factors
- Identify key characteristics of successful micro-franchisors and micro-franchisees
- Identify needed design improvements prior to full scale implementation and replication.
Based on certain key criteria, USAID LENS selected 3 pilots that showed promising potential and the willingness to test the micro-franchising model. Furthermore, USAID LENS developed a whitepaper recommending an approach for accelerating and scaling the impact of micro-franchising in Jordan.
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