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 Learned Economic Activity at the Base of the Pyramid

Lessons Learned Income and Consumer Spending

Lessons Learned Enabling 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 Learned Youth and Women’s Aspirations and Interests And Complementary Programs How to manage money? How to assess demand? Few organizations working in youth livelihoods and lack of knowledge.

Key Sectors and Opportunities Prepared Food VendorsPoultry

Key Sectors and Opportunities Dairy Fish

Key Sectors and Opportunities Agricultural ProductionMobile Banking

Key Sectors and Opportunities Garment Manufacturing Artisanal Crafts

Main criteria for the selection of these models Identifying sectorsIdentifying 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 models Model maturity rubric 4 - 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

Recommendations 1.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