Social Franchising in Scotland

Introduction

Franchising is a form of business expansion where an established company allows a franchisee to open and operate a new branch on its behalf. In exchange for using the company’s brand name and product/service, the franchisee pays the franchisor an initial set-up fee, plus ongoing costs. The franchisee also benefits from training, support, marketing assistance and other resources from the franchisor.

Social franchising works in a similar way, except it relates specifically to social enterprises who are looking to grow. It allows charities and non-profit organisations to expand the reach of their operations in new locations through a traditional franchise model.

The main difference between traditional franchising and social franchising, however, is that the primary goal of social franchising isn’t to boost the organisation’s profits, but to maximise the positive impact it makes in society. (Like any business, of course, a social enterprise still needs to make a profit in order to survive.)

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What Are The Benefits Of Social Franchising?

This positive impact on society could be anything from improving the wellbeing of the local community to tackling environmental concerns. Here at The Franchise Company, we’ve worked with social enterprises from all different sectors including mental health, education and children’s services. Over the last three decades, we’ve helped numerous social organisations franchise successfully.

Social franchising is a relatively new concept. It wasn’t until the mid ‘90s when social enterprises began to adopt a franchising model as a method of expansion. Because of the unique and complex nature of the issues that social enterprises serve to fix, there can be a wide variety of social franchising models. Some franchisors may want to maintain a high level of control over their franchisees and keep the funding centralised, while others may want to give their franchisees more independence and encourage innovation.

Whatever the model may look like, a social franchise will want to ensure that their overall mission is being fully realised by their franchisees.

Social Impact

Maximising your social impact. By expanding your organisation into new territories and sharing knowledge, information and practices with franchisees, you’re able to benefit more communities, improve more lives and achieve your overall objective as a social enterprise.

Financial Growth

Achieving strong and financially-stable growth. Although increasing profits isn’t the main reason behind social franchising, doing so can help your organisation expand effectively while attaining financial sustainability and longevity.

Raising Funds

Easier to raise funds. Being part of a strong social franchise network increases your chances of attracting investors/donors and securing funding for future expansion or endeavours.

Expand Your Brand

Quicker and more affordable way of expanding without compromising your brand. If you were to expand into new locations without using a franchise model, the cost will not only be much higher than, but you’ll be growing your organisation in a way that creates distance from the frontline.

Less Risk

Less risk. Studies show that franchises have higher rates of success than start-ups, primarily because they offer the franchisee a tried-and-tested blueprint, along with the added bonus of training, support, marketing, brand recognition and other resources.

Grow Independently

Best of both worlds. Social franchising allows your enterprise to reap the benefits of growth (economies of scale, more bargaining power) while still enjoying the perks of being an independent organisation (nimble operations, effective communication).

What's The Process?

Assessment

The first step of our process is assessing whether social franchising is a suitable option for your organisation - not just in the short term, but in the long term, too. There are many factors that we take into consideration based on our expertise, experience and up-to-date industry knowledge. If social franchising doesn’t make sense for your enterprise, then we won’t recommend it. At The Franchise Company, we always give honest and impartial advice.

If we believe that social franchising will help your organisation grow in a successful and sustainable way, then our next step is to fully understand your brand. We’ll look into everything from your finances and operations to marketing and competition, giving us a full and clear picture of how your organisation works.

This information then allows us to tailor a bespoke franchise model for your organisation. The model will be designed to maximise the impact of your organisation’s mission and achieving long-term financial sustainability while maintaining the integrity of your brand values.

Documentation

Once we’ve created a personalised franchise model for your organisation, we then produce the correct paperwork. This ensures that all parties involved are on the same page, allowing the franchisor, franchisees and investors to understand their individual roles, responsibilities and objectives. The documentation includes an operations manual, a franchise agreement, a franchise fee structure, a training programme and a territory analysis.

We’ll also assist you with producing marketing and recruitment materials to promote your franchise and attract franchisees. Finding the right franchisees is crucial to the success of social franchising. You need to find people who possess the necessary qualities, desire and trustworthiness while sharing your passion for your organisation and its mission.

Piloting the Franchise

Once our assessment, planning, documentation and recruiting phases are complete, it’s time to pilot your social franchise. We recommend starting out with a small number of franchisees (between 1 and 3) to help establish a strong foundation of franchises. We’ll support you through the entire process and even create a feedback loop between you and your franchisees to improve operations, strengthen relationships and identify and resolve any issues.

If your pilot is successful, we can help you continue to grow your network of social franchises. From training resources and franchisee recruitment support to marketing assistance and coaching/mentoring, we can provide you with the necessary guidance and support to expand even further.

Why Social Franchise In Scotland?

Scotland is a fantastic place to franchise your social organisation.

The country welcomes social enterprises with open arms and offers a fantastic support infrastructure for social franchises. In 2018 alone, more than £5 million of grant funding was allocated to social organisations. This wasn’t a one-off occurrence, as there has been more than a decade of sustained investment in Scotland’s social enterprise sector.

There’s arguably not a better time to social franchise in Scotland. Currently in full swing is the Scottish Government’s 10-year Social Enterprise Strategy, which aims to develop the potential of the country’s social enterprise sector and support organisations that are dedicated to social change. It’s a mutually beneficial relationship: the social enterprise sector contributes £1.68 billion to the country’s economy each year and sustains more than 100,000 jobs.

Scotland boasts a rich heritage of social enterprise. It was at his New Lanark textile mill where social reformer Robert Owen tested his ideas (including the eight-hour working day) and pioneered the cooperative movement. The mill developed an International reputation and was visited by social reformers, statesmen and royals from around the world. With more than 5,000 social organisations currently operating in the country, Scotland remains a hotspot for social enterprise.

By social franchising in Scotland, you’ll be stepping into a culture that truly values social enterprise and tapping into a market that’s rich with suitable franchisees.

Scotland’s franchise industry as a whole is thriving. By 2020, the sector is expected to be worth as much as £1 billion. However, that doesn’t mean Scotland doesn’t still face its problems. Rising levels of poverty, unemployment and wealth inequality continue to plague the country. This only creates a bigger and more urgent demand for social enterprises. If you’re looking to expand your social organisation through franchising, Scotland presents a huge opportunity to deliver truly transformational change for local communities who need it.

By social franchising in Scotland, you will receive plenty of support from the government and other bodies, be welcomed into a country that values and is proud of its social enterprise efforts, and be able to make a real difference to the lives of people who need it.

"The franchising industry in Ireland is worth approximately €2.5 billion and employs 43,000 people"

Case Study: Invisible Cities

We’re currently working with Invisible Cities, a social enterprise that trains people who have experienced homelessness to become walking tour guides of their own city. They offer a unique, interesting and increasingly popular alternative tour for locals and tourists alike while empowering disadvantaged people with new skills, confidence and stability. So far, they’ve trained more than 50 tour guides across four cities.

Invisible Cities currently run tours in Edinburgh, Glasgow, Manchester and York, and are currently gearing up to launch a new operation in Cardiff in February 2020. With our help, they’re actively looking to expand further into Scotland through social franchising. We’ve assisted them in producing a Franchise Prospectus that is already attracting plenty of interest.

Why Choose The Franchise Company?

Since our beginnings in 1991, The Franchise Company has helped over 200 businesses and organisations across all different sectors franchise successfully.

Our founder Julie Waites is one of the leading voices on social franchising in the UK and has been asked to become a trustee with the Social Enterprise Academy, an international social franchise network. Julie has a real passion for helping social enterprises to expand their operations and increase the amount of good they can do in the world.

We have extensive experience in both social franchising and international franchising, making us uniquely equipped to help your social enterprise successfully franchise in Scotland. It may be a part of the UK, but Scotland has its own franchising regulations -- not to mention social, cultural and economic complexities -- so it’s important that you seek advice from the experts.

As a BFA-accredited franchise consultants, we’re here to help you successfully launch and operate a social franchise while giving you honest, straightforward and trustworthy advice every step of the way.

If you have a social enterprise and want to expand your operation into Scotland using a franchise model, contact one of The Franchise Company’s trusted advisors today.

This page was written by:

The Franchise Company Team

With over 90 years of combined experience within the Franchising sector, we’re a specialist franchise consultancy firm affiliated to The British Franchise Association.

Introduction