Where Next for Social Franchising?

By Anna Gerrard, PSI

A couple of weeks ago, in a remote corner of New Hampshire, a small group of like-minded people met to discuss social franchising. The University of New Hampshire and the International Franchise Association brought together people from many diverse areas, such as the health sector, agri-business and water sectors with a common mission: how to build the social franchising ecosystem among diverse contexts, consumers, financing, and donor/investor relationships.

PSI first began its work in social franchising over two decades ago. This work was based on the idea that we could increase and sustain access to private health services at scale. Our approach has led to the growth of the largest health social franchise in the world, with more than 11,500 franchisees in 24 countries. Each year, PSI provides close to 9 million people with access to basic health services. Despite great achievements in making these services available to so many people, over the years we’ve increasingly recognized that not everything that appears broken in the health system can be fixed in exactly the same way in every country. Simply, because no health system and market is identical. Here are a few lessons we shared at the meeting.

Understanding the market

Every business needs to take into account the broader market as part of its business plan. The same is true for a health social franchise, which operates within a complex system made up of varying degrees of interrelated components and actors. For a succesful social franchise, we need to understand the entire system – from the market support functions, including market rules and regulation (e.g., around quality or financing), to the actors across the value chain (e.g., the government, health providers, commodity importers) – and learn what resonates with health consumers before designing solutions.

PSI took this approach to better understand the market for voluntary family planning in India’s two most populous states, Uttar Pradesh and Bihar. Using a market landscape analysis, we identified why tens of millions of women who need family planning are not using any modern methods. Female sterilization has been the major option for most women, many of whom are simply unaware of other options. The solution—to offer a wider range of voluntary FP methods—was designed to solve this market failure. While the path to distribution of those methods bears many of the hallmarks of traditional social franchising, the market development model takes a more agile and adaptable approach to fit with the needs of consumers, health providers and other health market actors.

Be fit for purpose

Just as companies design their value proposition (a service offered to customers to make a company more attractive) around their promise to consumers, social franchising too has to develop different scalable approaches to addressing problems in markets around the world. Over the years, PSI has learned that cost-effective provision of health services and financial sustainability are important parts of being able to deliver on that promise over the long term. In East Africa, we are radically shaking up our approach to the social franchise value proposition and will be among the first to take the leap from social franchising to social enterprise by increasing the revenue streams from revenue sharing, in exchange for benefits that grow the social franchise owner’s business.

Understanding and empowering consumers

Understanding consumer behaviors is part of PSI’s DNA. We know that where a woman will seek care for her child with a fever often differs from where she seeks contraception. This can be true for a woman in the wealthiest section of a society as well as the poorest. PSI pays close attention to the factors that contribute to these choices.

In Myanmar, PSI leverages mobile technology to periodically send notifications about pregnancy, maternal and child health to those who most need it. The products and services she may subsequently desire are also available from the network of providers that make up the franchise. This makes it easier for a woman to manage her health in a way that is more convenient and cost-effective.

The results of the New Hampshire meeting will be live in the coming weeks, in the form of three living case studies working in different sectors. As these three potential franchises receive mentoring support from experts (including PSI) in the areas of health and business over the coming nine months, their development can be followed online. Moving forward, our own approach to cementing quality private health services and ensuring access for all that seek health care also means looking at solutions that are being tried and tested in other sectors. Improving the long-term viability of the market is for the benefit of everyone seeking good quality health care for their families. We don’t have all the answers yet, but we look forward to learning and sharing with the world what happens, what goes well, and what turns out to be a lot harder than expected.

Photo credit: Jake Lyell