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Is Micro-Franchising a Solution to Fighting Poverty?

Micro-franchising is one of the recent business approaches that has its roots in the concept of traditional franchising systems. It is a model fundamentally designed for low-income communities, such as the ones in Nicaragua, to make their way out of poverty. Self-starters get the opportunities to become business owners without undertaking any significant entrepreneurial risks such as building from scratch, funding, brand recognition, distribution, etc.

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Is Micro-Franchising a Solution to Fighting Poverty?

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  1. IS MICRO- FRANCHISING A SOLUTION TO FIGHTING POVERTY?

  2. Micro-franchisingisoneoftherecentbusinessapproachesthathasitsrootsintheconceptMicro-franchisingisoneoftherecentbusinessapproachesthathasitsrootsintheconcept oftraditionalfranchisingsystems. Itisamodelfundamentallydesignedforlow-income communities, suchastheonesinNicaragua, tomaketheirwayoutofpoverty. Self-starters gettheopportunitiestobecomebusinessownerswithoutundertakinganysignificant entrepreneurialriskssuchasbuildingfromscratch, funding, brandrecognition, distribution, etc. Theconceptseemsrelativelynew, butitssuccessrateisquitehigh.

  3. WHATISTHEBIGDEALABOUTMICRO-FRANCHISING? Micro-franchisingisoneofthemosteffectiveandsuccessfulsolutionstofightingpovertyby creatingmultiplelocallyoperatedSMEs. Themodelseamlesslyadaptstothegroundrealities forhelpingthecommunitiestogrow. Itmaynotbethesolesolution, butisindeedasuperior approachforreplicatingprivate/ socialenterprisesinunderdevelopedordeveloping economies. Theconceptbasicallytreatsthecausesratherthanthesymptoms, whichaccountsforits success. Whenpeoplearehungry, wegivethemfood. Whentheyaresick, weprovidethem medicalcareandstartschoolsfortheuneducated. Whatholdsmoreimportanceistogive communitiestheskillsandmeanstohelpthemworktheirwayoutofhardships.

  4. Liftingindividualsorfamiliesoutofpovertysolvesamultitudeofotherassociatedproblems.Liftingindividualsorfamiliesoutofpovertysolvesamultitudeofotherassociatedproblems. Andasitisrightlysaid, “empoweringsolutionsworkbetterthandonatedorimposed solutions.” Thismeansthatpovertywouldyieldgrowthwhenlocalenterprisesprosper. CANMICRO-FRANCHISINGALLEVIATEPOVERTY? Micro-franchisingemploysthelocalpoor, forthepoortoaffordablyandsustainablyhelp reducepovertythroughbusiness. Suchamodelfocusesonminimizingcostswhile maximizingoutcomes. Itcombinesthestructureofatraditionaljobwiththeautonomyof self-employmentandthefranchisor’shand-holding.

  5. Forinstance, SupplyHopeinNicaraguaisoneofmanymajororganizationsthathelpscreate sustainableandscalableincomeopportunitiesforthepopulationthatbarelymakesbetween $1and $3perday. Micro-franchisingprovidesstablejobsandlivelihoodtopeoplelivingin low-incomegroupswhomayhaveneverbeenemployedorobservedasteadypaycheck. Franchisorsprovidethenecessaryfinancialandtechnicalassistancetohelpthesepeople standtheirmicro-enterprise, infact, builduponatestedmodelandreversethedynamicsof poverty. Itisamodelthatprovidesaregularincomestreamtocommunitiesinneedbased onaready-madebusinessplan. Itusesthesamemarketing, management, andoperational strategiesasatraditionalfranchisesystem, butonalotcheaperandsimplerlevel. Thisis whyitiscalledabusinessinabox.

  6. PeoplelikeElizabethValentearemuchnotedfortheireffortsandinitiativesconcerningPeoplelikeElizabethValentearemuchnotedfortheireffortsandinitiativesconcerning micro-franchisinginNicaragua. SheispartoftheSupplyHopenon-profitorganizationthat believesmicro-franchisingtobeaprolificsolutionforexpeditinglocalenterprisecreation thatwillultimatelyreducepovertytoagreatextent. Franchisorsprovidetheneeded operationalandmanagementtraining, finances, businessplan, andinventorytodevelopthe operators’ skillsetandhelpthemgivetheirbestinrunningtheirmicro-levelbusiness. The conceptis, infact, believedtobeadisruptiveplantocatertotheglobalBOP (bottomofthe pyramid) marketsfromthelocalinnovations. Insummary, micro-franchisingisanexcellentwaytocreatejobsandwealthinlow-income communitiesbyleveraginglocalbrandsthroughlocalentrepreneurswhileaccomplishingthe mostgoodforthemostsignificantnumberofpeople.

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