Microfranchising to the Rescue!

Bangalore, India, is the location of a new microfranchising enterprise which offers hope to the many millions at the base of the economic pyramid by providing ready-made, proven businesses to enable them to provide a more secure future for their family.

Mani, like many inhabitants of Bangalore, had an irregular income from his project-based job as a promoter for mobile phone companies. His dependent family of three depended on his income so he wanted a more regular and reliable job. The answer came in the form of a microfranchise with the Village Laundry Service (VLS), which now makes him $190 a month, significantly more than he earned previously.

Based on the idea of microcredit, which provides finance aimed at alleviating the poverty of the many families at the ‘base of the pyramid’, microfranchises aim to provide sound, proven businesses to increase the earning potential of the franchisee. VLS, for example, provides a complete roadside booth on wheels in which there is an environmentally friendly washing machine, a water handling system, a low-cost drying unit and an ironing board. The set-up enables the operator to process a batch of washing in 24 hours, in a convenient location, which compares favourably to the week most laundrettes in India require.

It is easy to see how an enterprising and hardworking young person, who has been trapped in poverty by his/her lack of resources, would be able to turn an opportunity like this to his/her advantage. The microfranchise is provided on a very low start-up fee with a pay-as-you-go basis to recover the cost of the rig. Full training is provided in both the operation of the rig and also the basics of business management, while the high-level business branding is done by VLS to enable the entrepreneur to maintain sustainable profits.

Individuals who get involved in a programme like this are not simply provided with a job with regular income. They are actually provided with the important business skills which will enable them to escape the poverty trap, by establishing their own businesses, which, in time will benefit many more people as businesses grow and jobs are created. Initiatives like this do not just provide aid to the poor, they provide opportunities for talented individuals to make a difference in their communities.

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