3.2 Franchising Their Way to Success: Youth-Led Microfranchises
With integrated programs, offering youth holistic support packages that combine business and/or technical training with life skills, savings-led financial services and start up assistance, is now considered best practice and widely implemented. Questions though remain as to how best to match youth with economic opportunities. This contextualization is particularly important in targeting, as with AGYW in particular, these considerations will determine if they are able to engage in and ultimately succeed in an economic opportunity.
The International Refugee Committee (IRC), an international development organization committed to offering life-changing assistance to refugees forced to flee from war or disaster, partnered with the Nike Foundation and the World Bank to explore the opportunities offered by microfranchising in enterprise identification. IRC and its partners specifically wanted to know if and how this enterprise model is suitable for adolescent girls and the best means to scale up the model in specific contexts. IRC has previously operated microfranchise models for youth on a small scale in Liberia, with almost 100 percent of a group of 100 youth still engaged in the franchises seven months after program completion. IRC’s YouthWORKS Microfranchise project is now replicating the pilot in Kenya to explore how the approach works in another country.
In the Kenya YouthWORKS Microfranchise pilot, IRC is partnering with three companies to offer microfranchise opportunities to a co-hort of 2,300 youth, with enterprise options as follows:
- Darling Hair Salons: specializing in weaves & braids
- Kenchic: Offering fried chicken via mobile food charts
- Dlight: Selling low cost solar products
In addition, IRC receives technical assistance from a variety of other partners including Innovations in Poverty Action (IPA) on monitoring and evaluation; Fairbourne Consulting & Open Capitol on franchise model design and assessment; and local NGO partners, YIKE & FHOK on training and mentoring to the youth mentees.
Based upon the Liberia project and now the Kenya pilot, which is just concluding its second year, the partnership offers some lessons to practitioners considering microfranchise and enterprise opportunity targeting.
When identifying microfranchise opportunities for and with adolescent girls, IRC and its partners have learned the following:
Consider your target group:
What are the literacy and numeracy levels?
- How much time will the target group have available weekly to invest in the business?
- When young people are attending school, they have little time available to focus on the businesss.
- What are the income and other goals of the group engaging in the microenterprise? Is this a short or longer term pursuit?
- If it is a short-term pursuit, then a microfranchise may not be appropriate, as the entry, training, and business start-up costs can be high.
- Income gains need to be significant enough to make the microfranchise a promising opportunity for the youth, and one in which the youth will want to engage.
- What is the likelihood that the youth will move?
- In urban Kenya, youth and particularly girls tend to move, leading to high drop out rates. This is less of a challenge in rural areas.
Be careful when identifying franchising opportunities:
What franchising opportunities exist? What investment would be needed by private sector partners and the implementing agency to establish a microfranchise model? What are the incentives for the private sector to engage?
- What is the market size/demand for the microfranchise product and/or service? How many microfranchises will this allow to operate in a given area, before they begin to compete and reduce profitability?