La MicroFranchise O2 Adie (LMFOA)

Competition Finalist

This entry has been selected as a finalist in the
Social & Business Co-Creation: collaboration for impact competition.

La MicroFranchise O2 Adie (LMFOA) is a social microfranchise network of independent gardeners that aims to offer a turnkey business model to low-income entrepreneurs who lack a viable business project idea or do not want to start their business alone.
Microfranchising is a development tool that seeks to apply the proven marketing and operational concepts of traditional franchising to very small businesses.

About the Lead Co-Creation Partners

Organization: O2 Homes Services Visit websitemore ↓↑ hide↑ hide

LEAD SOCIAL-MISSION ORGANIZATION

Type of organization (e.g. NGO, association, not-for-profit, foundation, social enterprise)

Association

Total Number of Full-Time Employees

453

Lead Contact First Name

Marie

Lead Contact Last Name

Degrand-Guillaud

Title

Marketing Director

Country

France

LEAD CORPORATE PARTNER

Organization Name

O2 Homes Services

Total Number of Full-Time Employees

9 500

Lead Contact First Name

Eric

Lead Contact Last Name

Schneider

Title

Franchise and International Development Director

Country

France

Basic Info

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Project Name

La MicroFranchise O2 Adie (LMFOA)

Project Subtitle

A scaled-down and affordable franchise to create your own gardening business being part of an experienced network

Select the stage that best applies to your project

Established (past the previous stages and has demonstrated success)

Project Starting Year

2012

Primary European Country where this Project is creating social impact

France

Additional European countries where this Project is creating social impact

Select the category that best fits the type of your project:

Job Creation: Entries in this category create new jobs for people away from the labor market.

What awards or honors has the project received?

Finalist of 2014 Giordano Dell’Amore Microfinance Good Practices Europe Award (Award winner to be chosen in June)

Project Summary

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Elevator Pitch: Help us pitch this solution! Provide an explanation within 3-4 short sentences. Share a concise summary

La MicroFranchise O2 Adie (LMFOA) is a social microfranchise network of independent gardeners that aims to offer a turnkey business model to low-income entrepreneurs who lack a viable business project idea or do not want to start their business alone.
Microfranchising is a development tool that seeks to apply the proven marketing and operational concepts of traditional franchising to very small businesses.

Problem: What problem is this project trying to solve?

In France, 40% of unemployed people are living in poverty vs. 8% of employed people. La MicroFranchise O2 Adie, as all Adie's social microfranchise networks, fights poverty and unemployment and empowers low-income entrepreneurs.
It originated from three main factual observations:
- An increasing number of low-income entrepreneurs have trouble developing their business activity or do not wish to start their business on their own,
- More and more people come to Adie’s branches willing to create their own small business but with no viable business idea,
- Very few “traditional” franchises are affordable to low-income entrepreneurs.

Solution: What is the proposed solution? Please be specific!

LMFOA has developed a simple and successful gardening turnkey business model which can be owned and operated by people living at the base of the pyramid and can be easily replicated. LMFOA microfranchisees benefit from the O2 trademark, its experience and know-how, shared services (communication supports, website, information, purchasing or billing systems, etc.) and assistance provided by the microfranchisor in exchange of a limited initial investment (< 10,000 euros, maximum amount of Adie’s microcredit) and small royalties. LMFOA fosters micro-entrepreneurship by removing most start-up obstacles. Running a “ready-made business in a box” is indeed easier than starting up one’s own business from scratch.

Co-Creation Model: Tell us about your main strategic partners and how the partnership truly create value. For each Partner please include its type (business/social/public), its name, a short description, its key motivation to participate in the co-creation project, and the key contributions it is making in the co-creation project. Please follow the format displayed below:

-Association pour le Droit à l’Initiative Economique (ADIE) - Organization for the right to economic initiative
-Social
-Adie helps people excluded from the labor market and the banking system to create their own business and thus their own job thanks to micro-credit support. Adie launched the social microfranchising initiative in 2009.
- Co-creation is the main purpose of social microfranchising. For Adie, partnering with O2 enables to offer microfranchisees strong business competitive advantages as they benefit from O2 trademark, know-how and shared services.
- Adie brings to the project a 5-year experience in developing social microfranchise networks. Adie also offers micro-franchisees a wide range of financial and non-financial services to help them start their business (micro-loans up to 10 000 €, microinsurance, business development services...).

- O2 Développement SAS
- Business
- O2 is the leader in France in home services, providing cleaning, childcare and elderly assistance to more than 36,000 families every week, employing and excess of 9.500 employees through a network of 163 branches (including 19 franchises to date).
- O2 believes micro-franchising is a real solution for development of home services, as it enables all parties to be in a win/win situation. Partnering with ADIE enables to offer an affordable package (total investment <10k€ with no cash needed) and increases dramatically the chances of candidates to succeed in creating and developing a profitable and sustainable business. Entrepreneurs are happy to be able to create their own business with strong partners at an affordable cost, customers are happy about the quality of services delivered by entrepreneurs.
- O2 brings a very strong experience and trademark to facilitate profitable business development in home services. O2 has both franchise and home services expertise to maximize the chances of success of mircofranchisees, let them run their own business, being part of a network of 163 offices throughout France delivering complementary services (home cleaning, childcare and senior assistance).

Impact

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Example: Walk us through a specific example of how this solution makes a difference; include its primary activities. (Hint: consider telling us a real story about the solution in action and how it creates impact. For idea-stage projects, consider providing a hypothetical example.)

Portrait of Bernard, gardener, O2-Adie microfranchisee since May 2013
After 15 years in his family farm and few years as an independent grocery manager, he became an employee in a supermarket. Sadly after an employer change, he was dismissed and became unemployed at 46 years old.
Bernard had troubles finding a new job. He started thinking about the idea of creating his own small business when he discovered O2-Adie microfranchise opportunity. “I liked the project. Being a microfranchisee means being part of a network”. In May 2013, Bernard joined LMFOA network, being financed and supported by Adie and trained by O2. “I felt warmly welcomed and truly supported”. His business is now well developing. “I have signed several annual contracts."

Impact: What is the impact of the work to date? Also describe the projected future impact. Please specify using qualitative and quantitative data (e.g. # of indirect and direct beneficiaries); help us understand how this solution truly makes a difference.

To date, LMFOA network has 20 independent gardeners, 20 direct beneficiaries that created their own job thanks to LMFOA. Their family can be counted as indirect beneficiaries. Among them, 90 % where unemployed before starting their business and 69 % have an educational level lower than high school diploma.
LMFOA aims to integrate 40 additional new independent gardeners in 2014. Overall, the potential of the network in France is 900 microfranchisees.
In addition to this job creation potential, LMFOA has an impact on job quality as it enhances low-income entrepreneurs’ profit and boosts their development path. Microfranchisees’ profits are indeed higher than stand-alone microentrepreneurs’ ones and sometimes even higher than employee wages in the same sector. The average monthly income of microfranchisee is 1,200 € (more than the French legal minimum wage).

Full Impact Potential: What are the main spread strategies moving forward? (Please consider geographic spread, policy reform, and independent replication/adoption of the idea or other mechanisms.)

LMFOA is one of Adie social microfranchise network. Adie has already developed two social microfranchise networks and created around one hundred self-employed jobs. The cumulated job creation potential of these two existing microfranchise networks exceeds 1,000. Five other microfranchise projects are currently under study or at a pilot phase. All in all Adie overall objective is to build 10 to 12 social microfranchise networks and create 3,000 to 5,000 jobs by 2020. Replicability and scalability are the main purpose of franchising. Social microfranchising is indeed a means of duplicating success.

Sustainability

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Funding: How is your project financial supported? [select all that apply]

Businesses.

Sustainability Plan: Has your project already reached financial sustainability? If not, what is this solutio’s plan to ensure financial sustainability? Do the main partners have enough stake to sustain the solution? If this project requires limited budget, how will other resources be secured to maintain or grow this work?

LMFOA is based on a profitable business model both at microfranchisor and at microfranchisee levels. This two-level profitability secures long-term sustainability of the microfranchise networks. Whereas microfranchisees breaks even very quickly (on average two months after their business launch), LMFOA microfranchisor will reach its break-even point after three years of activity, in 2015.
Current network development path and results validates this forecast.

Marketplace: Who else is addressing this problem and how does the proposed solution differ from these approaches?

Adie addresses main challenges faced by low-income entrepreneurs, who lack access to standard financial services, as the largest Micro Finance Institution operating in France. But there are no solution for low-income entrepreneurs who lack a viable business project idea or do not want to start their business alone.
Indeed existing low-investment franchise networks in France are very small, non professional, have a poor competitive advantages and have troubles breaking even.
LMFOA offers a true solution to these micro-entrepreneurs, with its turnkey business model.

Team

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Founding Story: Share a story about the "Aha!" moment that led the Partners to get started and/or to see the potential for this to succeed.

Home services market is booming in all developed countries, O2 ambition is to facilitate every day’s life by delivering quality and personalized home services, European countries are faced with increasing and unseen unemployment levels.
On one hand there are thousands of families struggling to find solutions, on the other hand thousands of people would be keen to work in this great.
LMFOA is a solution that meets all stakeholders' objectives :
- The micro-entrepreneur maximizes its chances to succeed.
- ADIE enhances its social impact offering an opportunity to entrepreneurs with no business idea.
- O2 offers a complementary service to its customers while strengthening its social impact.
- O2's clients have access to a new high quality gardening service.

Team: What type of team will ensure that you achieve your projected impact? Specifically, how do the corporations’ and the social-mission organisations’ top management each play a role in the success of this project?

O2 top management plays a key role in the project. Indeed O2 teams are in charge of all day-to-day operations of the microfranchise network.
As social microfranchising is a pillar of Adie strategy since 2009, Adie top management strongly supports the initiative. More specifically, Adie top management is involved in LMFOA as board members.
The operational team is composed of staff from both Adie and O2 who work together on a day-to-day basis. Within O2 and Adie, several stakeholders are involved, from General Director to employees and volunteers.

About the Co-Creation

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Barriers: What main barriers may you have encountered to co-create during the creation and implementation of the project and how did you try to overcome them?

LMFOA faced two main challenges:
- The French complex legislation, which can sometimes appear as a real constraint for social innovation and the development of simple concepts, scalable and easy to duplicate.
- The project development path, which was slowed down by operational issues for both sides.
The complementarity between O2 and Adie was the answer to both challenges. Both partners brought their expertise to the table to address legal issues and adapted their internal processes to support the development of the network.

Governance: What is the type of the relationship between the partners? (e.g. joint venture, contractual relationship, joint project...)

LMFOA is a joint venture between O2 Home Services and Adie social microfranchising investment fund (AMSI). AMSI is a for-profit social investment fund that provides financial support to generate a social impact alongside a financial return.

Interaction model: How is the project a transformative partnership? How is the interaction transforming the partnering organizations and their employees/ leadership in terms of creating a new vision, new management practices, new skills and new organizational structures? Please provide for concrete examples

For Adie, LMFOA is the first joint venture built together with a well established company. This new initiate required a strong training and communication effort to make sure all employees and volunteers bring the best quality service possible to microfranchisees.
For O2, the main changes consists in having a new relationship with service providers who are not employees but micro-entrepreneurs. Microfranchisees as LMFOA members have a very strong relationship to O2 employees . O2 also had to be very creative about the level of training and support provided to microfranchisees (ie. visio conference, video training and e-learning; experienced microfranchisees validate new ones to allow them join the network...).

How did you find out about this competition?

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21 weeks ago Basile ALBERT said: Hello Mathias and Christopher, Thanks for your comments. Adie is in fact developing the same social microfranchising concept in several ... about this Competition Entry. - read more >
21 weeks ago Christopher Wasserman said: I agree with Mathias Fuchs, can we apply this model to other small SME's in other trade ? about this Competition Entry. - read more >
21 weeks ago Christopher Wasserman said: I agree with Mathias Fuchs, can we apply this model to other small SME's in other trade ? about this Competition Entry. - read more >
22 weeks ago Matthias Fuchs said: A question that jumps to my mind, why you are limiting this to gardeners, rather than opening it up to other specialists e.g. plumbers, ... about this Competition Entry. - read more >
33 weeks ago Basile ALBERT submitted this idea.