Finance News: Franchise plans for enterprises

Community Action Network is launching a national programme that will offer the opportunity to franchise social enterprises.

The programme, entitled Beanstalk, will work with existing social enterprises to develop strategies that boost growth by allowing other organisations to replicate their businesses.

Charities that sign up to Beanstalk will receive access to finance, expert advice, business coaching and up to three months' hands-on help from an experienced commercial manager.

Ten charities will be chosen to pilot the scheme. Beanstalk representatives will work with each of them over the next two years to prepare them for franchising and help them get to the stage where they are ready to approach potential franchisees.

Donald Findley, director of finance and development at the network, said he expected it to be a challenge to find 10 enterprises that met all the criteria, which is intentionally stringent.

"For example, they must be making a surplus, because if they are not, we don't want to encourage others to adopt that model. They must also be providing genuine social value and must not be dependent upon an individual or a unique set of circumstances.

"Franchising has had a bit of a bad press in the commercial world and we want to make sure that doesn't happen here. That's why we want to franchise the best, not the average."

The network decided to launch Beanstalk after successfully franchising Green-Works, the furniture recycling business.

The programme is being led by Owen Jarvis, director of social franchising at Community Action Network. It will be funded by the Small Business Service's 'Building on the Best' programme, and run in partnership with Exemplas, a business consultancy.

Six regional seminars will be held during the final two weeks of June to explain the concept to interested groups and examine whether those attending are suitable candidates for a franchise business model.

"Beanstalk is one of the most exciting developments in the social enterprise sector to date," said Jarvis. "If the sector is to become a major player in the British economy, it needs to find ways to grow."

Jarvis intends that the Beanstalk website, beanstalk-biz.org.uk, will become the UK's most frequently visited site for information about social franchising.

Findley explained the rationale behind the programme's name: "There is perhaps nothing that symbolises healthy, organic growth better than the beanstalk. Its central stem grows high and strong, and the roots grow deep into the earth, giving each branch the food and support it needs to grow. With our model, existing social enterprises can become the stem of their own beanstalks, giving others the opportunity to be one of their branches."

See News in Focus, p12.

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