Ensuring Social Franchise Sustainability

After a decade of rapid growth and wide success of health social franchises, programs and their donors are turning their attention to ensuring the longevity of these enterprises. This issue is particularly relevant in a climate of decreased donor funds for middle-income countries. The Global Health Group at the University of California at San Francisco investigated strategies used by eight health social franchises in Africa and Asia to improve their financial sustainability. Findings are presented in the form of a 'Lessons Learned' report. The report raises key questions about how paths to financial sustainability impact the health and equity goals of franchising, and what this means for the role of donors in social franchising. This report was funded by the UK Department for International Development. 

Franchise programs are taking many approaches to becoming more financially sustainable. In the Philippines, Well Family Midwife Clinics and BlueStar Pilipinas helped their franchised midwives become accredited under the national health insurance program, PhilHealth. By linking with PhilHealth, franchisees can serve lower income clients while receiving reimbursement rates much higher than typical out-of-pocket fees. Unjani Clinics in South Africa and CFW Shops in Kenya use traditional commercial franchise strategies to fund their operations – building the business capacity of franchisees, charging higher franchise fees, and expecting franchisees to cover more of the operating expenses. Living Goods in Uganda partners with the Ministry of Health, and Smiling Sun Bangladesh contracts with large companies to provide healthcare to their employees.

These social franchises, and their diverse approaches to sustainability, point to strategies all franchises can pursue to improve their financial viability. Greater attention to cost-effectiveness, expansion of the scope and scale of programs, innovation, and better alignment with national health systems will be essential. This report also highlights the trade-offs franchises may face as they balance their sustainability needs with the health and equity goals of social franchising for health. For more information on how franchises and donors can approach sustainability, find the full report at http://bit.ly/sf4health.

Photo: Kwaggafontein Clinic, courtesy of Unjani Clinics ©2012