Micro-franchising strategies: Drawing lessons from franchise literature

J. Mark Munoz, Ilan Alon, and Matthew C. Mitchell INTRODUCTION Micro-franchising has evolved from beginnings in non-profit development communities to the broader business community. Its proliferation in emerging economies such as Kenya, El Salvador, and India has led to the establishment of profitable organizations, creation of jobs, alleviation of poverty, and sustainable economic development. We are aware of the potential of this emerging business model, but are concerned about the paucity of academic literature on the subject. This chapter attempts to remedy this situation by synthesizing existing perspectives and stimulating new avenues of research. Specifically, we explore viable models in the practice of micro-franchising by revisiting literature pertaining to its precursor - franchising. Contemporary cases are highlighted in order to identify effective and successful strategies. To achieve these objectives, the chapter is organized into three sections. First, main franchising concepts are reviewed, including research findings on challenges, opportunities, and existing models. The following section on micro-franchising reviews current cases to describe the salient characteristics of an emerging business model and the main drivers for micro-franchising success. Finally, an analysis and discussion is presented including a model for effective implementation of micro-franchising, directions for future research, and implications for practitioners. REVIEW OF FRANCHISING LITERATURE Franchising is not a new business concept. The terminology originated in France, and translates to the provision of a right (Williamson, 1992). 155 156 Contemporary microenterprise While franchising as a business model was practiced for a long time, its application has evolved into diverse forms. At its core,….