November 2012

Franchising as a Development tool
Alvaro HIDALGO reunites cross sector experience in Investment Banking, Hospitality and Energy in LATAM, US & EMEA and has led Technical Assistance programs for Public Sector Reform, Public Enterprise Reform and Poverty Reduction programs in LATAM. As an Agribusiness Social Franchise Entrepreneur, founded a Start-up for the introduction of IT in small agriculture facilities to enable traceability of produce, resulting in a higher added value for small flower farms in developing countries. Currently researching the applications of the franchising model to Rural Electrification, Rural Mobile Communication and Rural Population Access to Market.

The franchising model is frequently mentioned as an alternative to be considered in development projects. It is indeed a versatile development tool that can be used through Private Initiative and Public actions leading to self sustaining economic activities and Social services. Its configuration enables the integration of Capacity Building processes, implementation of Access to Market, Access to Banking and Access to Information strategies whilst prompting individual and communal/ collective initiatives, fostering financial responsibility, enabling multiple financing/funding schemes and creating incentives for growth. Yet, franchising as a development tool has been secluded to limited sectors (Health, Telecoms) and its business cycle based on successive stages -each of them requiring differentiated business & management strategies- has been considered as a pitfall instead of an opportunity.

Franchises are based in the capacity of the Franchiser to replicate a production, operation or business model and to license it to multiple third parties, who in turn serve the resulting goods and services to a larger population in different geographic areas. By licensing operational and