What is "microfranchising"

Microfranchising is a business model that applies elements and concepts of traditional franchising to small businesses in the developing world. It refers to the systemization and replication of micro-enterprises. Microfranchising is broadly defined as small businesses that can easily be replicated by following proven marketing and operational concepts.

According to Acumen Fund, microfranchising is "a development tool that leverages the basic concepts of traditional franchising, but it is especially focused on creating opportunities for the world’s poorest people to own and manage their own businesses." The objective of microfranchising is to promote economic development by developing sound business models that can be replicated by entrepreneurs at the base of the socio-economic pyramid ( bottom of the pyramid), thereby providing self-employment opportunities to those who lack entrepreneurial skills. Key principles include replication, sustainability, and social impact.

In developing countries, microfranchising attempts to solve the dilemma of the "necessity entrepreneur" by providing job opportunities to those who lack fundamental entrepreneurial skills. Many companies and organizations provide business opportunities and services to the poor by introducing scaled-down business concepts found in successful franchise organizations. Although it is sometimes seen as a new development in the social enterprise sector that follows in the footsteps of microfinance and microcredit, a form of microfranchising may have developed concurrently with microcredit in Bangladesh.