On the morning of December 1, 2020, at the invitation of the Department of Sociology and Social Work, Professor Li Jian, from Central University of Nationalities, shared an academic lecture entitled "Social Franchising and Social Enterprise Scale" in classroom 409 of the Xianlin Campus of our university, which was chaired by Mr. Yang Jianxiao.
First of all, Professor Li Jian expounded the concept of social enterprises, and pointed out that: how to use the scale effect of the network to attract capital, exert the scale economy, so as to achieve considerable economic and social impact, causing a wider range of social innovation and social change, which has become an important issue to many social enterprises in China. Social franchising can rely on a small number of resources to rapidly expand the size of the organization, which considered to be the best strategy for the expansion of social enterprises and the spread of social innovation.
Then, Professor Li Jian introduced two ways of expanding the scale of social enterprises -- internalization and mixed governance model，and discussed the logic of scale expansion with the examples of three companies .
Professor Li introduced the specific meaning of social franchising, arguing that the franchising system is defined as an agreement between two independent parties that gives a person or group of people (franchisees) the right to promote products or services using the trademarks or business names of other enterprises .The franchisee is entitled to the manner in which the franchiser operates .The franchisor agrees to be obliged to provide these rights and support to the franchisee.
Social franchising is divided into three generations: first-generation franchising, which is licensed itself, has few business models, primarily distribution, and is often used by large global industries as a way to bring products to foreign markets. Second-generation franchising combines licensing with strict operational responsibilities .The business format franchisee transfers not only the franchisor’s brand and products, but also the entire business model, including operations, proprietary technology and other value-added activities. The third generation of franchising was pioneered by microcredit.
Professor Li cited three cases to elaborate on the model of social franchising. Social franchising usually takes three forms: 1, the system of commercial organization, aims to achieve social benefits. 2, non-profit replication system, including the core elements of franchising, but there is no traditional cost and profit elements. 3. subsidized franchising systems to provide services at a lower cost than commercial solutions.
In the end, professor Li Jian summarized the whole lecture, social enterprises need to abide the following points to achieve sustainable development: clear scale expansion objectives, building a good ecosystem, ensuring that business models can be verified, elements are feasible to selection criteria, establishing an effective franchisee management system and communication mechanism, balancing social enterprise business means and social objectives, avoiding mission drift, transparent financial management and strict self-discipline. Finally, Professor Li Jian encouraged students to pay active attention to the field of social enterprises, try to intervene our society in this way . With us students’ warm applause, this wonderful lecture came to an end.