FOROMIC

Diagnostic Study of the Microfranchising Environment in Haiti

October 3, 2013

Daisuke Funai International Rescue Committee

Introduction

This study was designed to inform the MIF/IDB’s agenda “to pilot and test the development of microfranchising models that provide both employment and business opportunities to people at the base of the pyramid (BoP),” particularly for women and youth.

Introduction

• current economic activity at the BoP• income and consumer spending• enabling environment• access to finance• aspirations and interests of women and youth• complementary programs serving vulnerable women and youth

>> microfranchise sectors and companies

Lessons LearnedEconomic Activity at the Base of the Pyramid

Lessons LearnedIncome and Consumer Spending

Lessons LearnedEnabling Environment and Access to Finance

• cumbersome regulations and bureaucracies• lack of production, innovation• low capacity of the workforce• dependency on imports

• Few people qualify for or use financial services.

Lessons LearnedYouth and Women’s Aspirations and InterestsAnd Complementary Programs

• How to manage money?• How to assess demand?

• Few organizations working in youth livelihoods and lack of knowledge.

Key Sectors and OpportunitiesPrepared Food Vendors Poultry

Key Sectors and OpportunitiesDairy Fish

Key Sectors and OpportunitiesAgricultural Production Mobile Banking

Key Sectors and OpportunitiesGarment Manufacturing Artisanal Crafts

Main criteria for the selection of these models

Identifying sectors Identifying companies

Market size Competitive Landscape

Microfranchisee’s Profile

Other factors (e.g., safety)

• proven business models; strong, recognizable brand; high management capacity; willingness for partnership; etc.

Potential for microfranchising

• feasibility of systematizing and replicating a component of its business model to scale, profitability, etc.

Microfranchise model

• Beneficiaries’ interest in working with each of the companies, minimum income benchmarks, etc.

Microfranchisee’s perspective

Main criteria for the selection of these models

→ Brand/quality recognition→ Willingness for partnership→ Model aligns with company

strategy→ Management capacity→ Ease of conversion for

business operations→ Model maturity/readiness→ Financial feasibility → Profitability → Unmet demand / market

size / scalability→ Enabling regulatory and

operational environment→ Franchisee - ease of entry→ Conforms with international

best practice

Main criteria for the selection of these modelsModel maturity rubric4 - highly conducive or high potential for microfranchising model

The company has conducted market studies. The company has already piloted or developed microfranchise business models. The company has already implemented a form of microfranchising and is ready to refine its

models or approaches and reach greater scale.

3 - somewhat conducive or has potential for microfranchising model

The company may have conducted market studies. The company has considered expanding through different models and strategies that resemble

microfranchising and has taken some preliminary steps to realize this vision. The company may have ideas or strategies but has yet to realize them due to nascent stages of

model development or lack of funding. The company’s current business model would be simple to systematize and replicate for

microfranchising. (e.g., food distribution)

2 - some risk for microfranchise model

The company probably has not conducted market studies and its plans for expansion are based on assumptions.

The company may have considered expanding through models and strategies that resemble microfranchising but has taken little action to realize this vision.

The company may have ideas or strategies for expansion, but these plans rely on other external variables beyond their control.

1 - high risk for microfranchise model

The company has not conducted market studies and its plans for expansion are based on assumptions.

The company may have considered expanding, but all ideas are in nascent stages and they have taken little action to realize any vision.

The company may have ideas or strategies for expansion, but these plans rely on other external variables beyond their control.

Main criteria for the selection of these models

1. promote microfranchising as a viable, productive and sustainable strategy,

2. allow the overall strategy to reach scale,3. engage vulnerable populations such as women and

youth, and 4. promote innovative private sector development

models.

Main criteria for the selection of these models

1. promote microfranchising as a viable, productive and sustainable strategy,

2. allow the overall strategy to reach scale,3. engage vulnerable populations such as women and

youth, and 4. promote innovative private sector development

models.

Business Models with Potential for Success

Business Models with Potential for Success

Business Models with Potential for Success

Business Models with Potential for Success

Business Models with Potential for Success

Recommendations1. Identify priorities for microfranchising and Haiti.2. Begin with proven and simple models to quickly promote

microfranchising as a viable strategy. 3. Develop and refine more innovative models. 4. Build foundational skills and knowledge, especially with regard

to beneficiaries’ long-term financial goals.5. Use IDB and MIF’s influence to improve financial services. 6. Work with urgency to kick-start project in Haiti in order to

sustain enthusiasm, interest and momentum with companies. 7. Allow enough investment and time for strategy to develop.

Muchas gracias.

Daisuke Funai International Rescue Committee