How to Franchise My Non Profit Organization

According to the Urban Institute's "The Nonprofit Almanac 2008," "in 2006 nonprofits accounted for 5 percent of GDP, 8.1 percent of the economy's wages and 9.7 percent of jobs in the United States." As the nonprofit sector seeks new opportunities for growth and sustainability, franchising is an emerging model used by nonprofits to serve additional communities and generate more revenue. If you are looking for strategies to franchise your nonprofit organization, follow these steps to expand your social enterprise into new markets successfully.

Difficulty: Challenging

Instructions

Things You'll Need:

• Nonprofit business model
• Franchise application packet
• Cost breakdown of nonprofit franchise operations and marketing budget

1. Develop a solid nonprofit concept for duplication. Before you consider accepting franchise offers, ensure that your nonprofit entity has a proven and profitable business model. In the June 2006, issue of "Franchising World," Ben Litalien, CFE, president and CEO of Social Franchise Ventures, states that "there are less than 100 social franchises in the United States today. Without a documented business plan for success, and operations support, your nonprofit franchisee will not have detailed systems to follow and processes to attract and serve constituents without error."

2. Create a defined cost structure. A nonprofit franchise will require capital to execute its initiatives and hire employees. Before soliciting individuals or corporations for nonprofit franchise partnerships, develop a 3-year financial plan to identify costs associated with building and maintaining a nonprofit franchise.

3. Locate the right partners with capital and a commitment to your organization's mission. Identify potential franchise partners with the necessary capital to launch the business and enthusiasm to maintain your mission. Launching a new nonprofit organization requires determination and the ability to compete with existing service providers. Without adequate funding, and partners who are committed to the mission long-term, the new nonprofit franchise may fail.

4. Provide marketing, operations and sales support to maintain brand consistency. An established nonprofit has strong brand equity and name recognition within a community. A nonprofit franchise can capitalize upon this brand equity to compete in the marketplace. To ensure that your nonprofit franchisees' actions and processes are consistent with your existing branding efforts, provide additional seminars, training and marketing materials.

5. Evaluate and monitor nonprofit performance. If you've given your franchisee well-documented operating systems, training, marketing and management support, create methods to track the progress of your nonprofit franchise. Help the franchisee develop methods to balance the mission of the nonprofit organization with the requirements to generate profits and grow a viable nonprofit entity.

Tips & Warnings

• Create a detailed application process to evaluate potential partners before committing to a franchise agreement. Allow your nonprofit franchisees access to your accounting department to comply with strict IRS reporting standards for nonprofit entities. Encourage your nonprofit partner to use the efforts of volunteers and board members to reduce the costs of employee salaries during the first few months of the nonprofit franchise launch.

References

• "The Nonprofit Almanac 2008"
• Era of the Social Franchise: Where Franchising and Nonprofits Come Together

Resources

• Chronicle of Philanthropy--Building the Charity Franchise
• Ben Litalien's Social Franchise Ventures