Success chain - a social franchising moddel that works
see also File:PEIRAN leaflet.pdf
The Peiran EQUAL project developed a social franchising model – a network of social enterprises owned and operated by young unemployed people (especially young women and people with disabilities). This network consists of shops selling traditional, organic and alternative products and services with parallel cultural actions. Peiran’s experience shows that:
- social enterprises and co-operatives can become important sources of entrepreneurship and employment creation
- common organisation, training and marketing strategies lead to: (a) reduced business risk and increased job security; (b) increased uptake of skills and more possibilities for integration with the local economy and society.
A broad partnership
The project was promoted by Mentor Training, a vocational training centre based in Western Greece, and involved a huge number of partners. Municipalities and development companies of the target territories played a major role: General Secretariat of Epirus Region, Prefecture of Ioannina, Municipality of Agrinio (Western Greece), Municipal Company of Argostoli for Social Development, Centre for Local Development of Western Achaia, Development Company of Lesbos Island Prefecture, Development Company of Samos Island Prefecture, Development Company of Parnon mountain. The Co-operative Bank of Ioannina (Epirus), the Agricultural Co-operative Company of Epirus and Corfu and the Technological Educational Institute of Patras were also involved.
The initial franchisees were three co-operatives previously established under the Employment Initiative: ROTA – the cultural café (Ionian Islands); SPORA – Production & Trade of Biological Products (Western Greece) and Oinithiki Wineries – Promotion & Trade of Kefallonia Wine (Ionian Islands).
A well-organised and integrated system
The idea behind the project was to develop a social franchising model comprising a network of seven social enterprises (franchisees), under the support and entrepreneurial guidance of one social franchisor. The social franchisor was established by three existing co-operatives, and later similar enterprises were established in remote areas. The social franchisees keep their particular local characteristics, but the social franchisor promotes each franchisee’s products using a common marketing strategy, brand name and publicity campaign. Moreover, the entire network encourages and promotes alternative cultural activities in remote communities, such as debates on local development and local cultural issues, information meetings on the social economy and its potential, folkloristic events, etc.
The seven franchisees are all in the business of trading in traditional, organic and alternative products and services with parallel cultural actions, and in the near future it is planned to expand into the area of standardisation and production. The major products are processed agricultural products like oil, wine, pasta and jam. Moreover, the shops act as reference points for local cultural development and the social economy, by providing information about social economy and local initiatives.
Shops are located in commercial areas and they all have the same décor. The premises are rented on a commercial basis, with the exception of Leonidio where the municipality provides the premises free of charge. The common brand name covers the following enterprises:
- Peiran–Patras (Western Greece)
- Peiran–Agrinio (Western Greece)
- Peiran–Ioannina (Epirus)
- Peiran–Argostoli (Ionian Islands)
- Peiran–Sparti (Peloponnese)
- Peiran–Leonidio (Peloponnese)
- Peiran–Samos (Northern Aegean Islands)
The social franchisees are co-ordinated and supported by the social franchisor, which is also a social enterprise. As well as operating as a social enterprise, it has the responsibility of providing to the franchisees:
- marketing plans
- publicity support
- systems of product distribution and supply
- entrepreneurial and financial guidance
The franchisor is financed by the fees the franchisees pay, and its offices are located in Patras (Western Hellas).
EQUAL supported the following development activities:
- Research: needs analysis (analysis of target groups’ socio-economic profile), specification of key entrepreneurial opportunities, inventory of third sector organisations in the intervention regions, research on new financial tools and models for social co-operatives, study on mainstreaming the social franchising model and its best practices.
- Development of a social economy internet network to provide monitoring, technical support and information, foundation and support of the social franchisor. This internet network was used by the trainees to exchange experiences and information, especially during the critical phase of enterprise start-up.
- Development of tools and methodologies such as an innovative educational CD-ROM (simulation of social co-operatives), ICT tools to support social entrepreneurs, and business plans for the social enterprises. Those tools were tested by the trainees and are meant to provide information to all those who want to set up a new Peiran enterprise. Not only they can find all the useful information on legal framework, fiscal regime and other requirements to create new social enterprises, but also they can test a business plan in order to understand the economic sustainability of the initiative.
- Connection of economic activities (traditional alternative products) with cultural activities through a package of actions aiming at the exploitation of significant cultural local characteristics. Beside their commercial activity, the shops organise cultural events (i.e. concerts, conferences, folkloristic events, etc.) for the local population. They aim to become a focal point of local cultural life.
- Training courses: training of young unemployed people in the intervention areas, training of managers and consultants in the social economy sector.
- Dissemination and evaluation: forum for social economy, project evaluation reports, dissemination of the social franchising model and incorporation of best practices in mainstreaming policies and practices.
The Greek local context
The main discrimination problems that the target groups faced in accessing the labour market were connected to the scarce diffusion of social economy in Greece and the isolation of intervention areas.
In Greece, the lack of quality jobs for young people is a common characteristic of many areas, especially the most remote and insular regions. Often young unemployed people in remote regions of Greece do not undertake entrepreneurial activity in the social economy because they do not have access to appropriate information services, financial opportunities and vocational training courses.
The lack of supporting infrastructure, public or private, addressed to social enterprises is also a common trait of the Greek context. Local authorities are not aware of the potential of the social economy for enterprise and job creation. Financial institutions do not consider the specific features of social enterprises, making access to credit very difficult. Therefore, young people who want to create social economy enterprises are easily discouraged. Last, but not least, connections with local producers are very important to keep the local roots of the initiatives. A big effort is required to create stable connections with agricultural producers at local level.
The Peiran development partnership aimed to address these problems through its multilevel and representative nature, taking advantage of the partners’ previous experience, know-how and capabilities. More specifically, the project’s objectives were:
- To promote alternative social entrepreneurship among young unemployed and low-skilled people, with emphasis on young unemployed women and physically disabled people, resident in remote semi-urban, as well as mountainous and insular areas in the Regions of Western Greece, the Ionian Islands, Peloponnese, Epirus and the Northern Aegean Islands.
- To develop and operate alternative social enterprises, by implementing the innovative social franchising model.
- To exploit local resources and alternative sources of employment to help co-operatives grow.
- To develop strategies and mechanisms to promote, transfer and exchange entrepreneurial know-how in the third sector.
- To activate policy makers at local, but mainly at regional and national levels, in order to foster mainstreaming and dissemination of Peiran’s innovative approach, namely the social franchising model.
The specific entrepreneurial objectives in this case have a strong social character, considering that the target groups are disadvantaged young unemployed with low or insufficient qualifications. The social franchising model offers them the opportunity to develop an entrepreneurial culture and gain knowledge, experience, methodologies and tools in order to establish their own social co-operatives under the support, entrepreneurial guidance and monitoring of one social franchisor.
The social franchising model allows mutual support among many social enterprises, therefore boosting their entrepreneurial growth and prosperity. Given that each social franchisee sells the products of the other members of the network along with its own, they reduce business risk. Furthermore, the common distribution, supply and marketing system under the same trademark and brand name favours recognition of the products in local markets. Such an open model of social franchising also maximises the possibilities of further expansion of the network to include new members.
Most existing social enterprises operate in the services sector, for instance offering help to old and disabled people or recycling. These activities are not very profitable or economically sustainable. By contrast, Peiran created social co-operatives in the field of production, standardisation, promotion and sale of traditional local alternative products, with a cultural dimension. This field of entrepreneurial activity is increasing rapidly all over Europe, and also offers remarkable added value to the strengthening of remote communities.
Another important factor, crucial to the sustainability of the social enterprises in the network, is that reliable national and European authorities and organisations officially certify all the organic products they trade. Moreover, all Peiran social enterprises follow and implement the official set of specifications of HACCP systems, and soon they will be the first social enterprises in Greece to obtain ISO 9001/2000 quality certification.
Exploitation of existing structures:
Three co-operative enterprises, established under the Employment Initiative and trading in similar fields (traditional and alternative products) participated in the Peiran DP. This contributed to the empowerment of the target groups, fostered the bottom-up approach, and exploited the best practices established in the previous European Initiatives.
One of the basic principles in developing the social economy is to build self-managed and autonomous social enterprises. The choice that the Peiran development partnership made to adopt participative administrative, management and decision-making procedures promotes democracy, autonomy and co-operation among social entrepreneurs.
Moreover, the franchisor, which co-ordinates and supports the network, is a social enterprise established by the seven social enterprises that make up the network, and therefore belongs to them. This means that each franchisee-social enterprise owns an equal share in the common enterprise, the social franchisor, without of course paying royalties, as is the case in classic franchising models.
Some figures The basic results of the project are the following: * Better employability of young unemployed people in the project areas; * Creation of eight social enterprises using the social franchising model (seven social franchisees plus one social franchisor). The average staff of the co-operatives is two, all full-time (in tourist areas they work shifts in order to stay open for long hours); * During the period 2/10/05-28/02/06, the seven PEIRAN franchisees turned over €105,000. The shop in Samos ranked first with an average monthly turnover of €5,200; * Creation of 17 new quality jobs; * Creation of a social economy internet network; * Development of an innovative self-training CD-ROM (simulation of social enterprises); * Training of 20 social managers and 70 low-skilled young people (eight training programmes comprising 29,672 person-hours of training); * Dissemination of the social franchising model and incorporation of best practices in mainstreaming policies and practices; * Involvement of almost 30 organisations both local and national, in the support and strengthening of the social franchising chain (horizontal mainstreaming); * Connection of economic activities (traditional alternative and organic products) with cultural ones; * Strengthening citizen participation, solidarity, cohesion and community work.
Horizontal mainstreaming: Two thematic workshops were held in Thessaloniki and Crete in order to explain the “Peiran mechanism” to local authorities, chambers of commerce, financial institutions and local associations.
One of the project partners, the co-operative bank of Ioannina, made various proposals on how to ameliorate the access to credit of social enterprises.
The social franchisees themselves are promoting horizontal mainstreaming. Beside their commercial activity, the shops are thought to be a local reference point for social economy and local development. In the most remote areas (e.g. Samos) they are the only social economy initiative, so they can play an important information and promotional role.
Vertical mainstreaming: The Peiran DP aimed to disseminate practical information to local and central government bodies, policy makers and various organisations working in the field of the social economy. It presented the good practices experimented with through Peiran at various local meetings, to stimulate a strong and spontaneous development process in order to strengthen the third sector. A successful result was the collaboration with the mayor of Leonidio who decided to provide the premises for Peiran shop free of charge.
Moreover, the dissemination of good practices enabled the Peiran DP to explore and enhance the employment potential of the third system, with an emphasis on sectors of sustainable economic development, other that the ones explored through Peiran.
At national level, progress is much slower, but awareness was raised on the potential of social enterprises and social franchising as a model for sustainability and employment growth. The contribution of the transnational partners brought added value to the mainstreaming activities of Peiran. The visits to more advanced social economy experiences were very useful in contributing new ideas and development policies validated in other European countries.
Local development: Local development is a key issue of the whole project. Social franchisees are deeply rooted in the area where they are established and well connected to all the relevant local actors. They employ local people (who otherwise will be forced to emigrate) and foster the development of local culture and traditions by organising cultural events and activities. Moreover, each social enterprise sells local products that meet local needs and suit the area’s socio-economic situation, but at the same time also sells the products of the other social enterprises in the network, thus creating new markets for products that otherwise would not be able to reach consumers. For example, in the social enterprise Peiran–Argostoli, which sells the traditional island wine, the consumer can also find all the organic and traditional products of the other social enterprises in the network, such as traditional wine from the Peloponnese and Ioannina, and organic jams and sweets from Agrinio and villages in Epirus. All these places are located far away from Argostoli – which is on the island of Kefallonia – so otherwise there would be little chance that these traditional products could reach customers in Argostoli. In addition, these products are usually homemade, so the people that produce them have no marketing experience.
Gender mainstreaming: The policy of equal opportunities between men and women was highly respected throughout the Peiran project and constituted an essential element of its philosophy. Specifically:
- With regard to the empowerment of the target group, great emphasis was placed on young unemployed women with low education skills;
- The follow-up indicators of the project have been analysed with gender issues in mind;
- The equal opportunities dimension has been incorporated in the parameters of the project evaluation report, as well as in the general assessment report of the project impact on national policy;
- The principle of equal opportunities was integrated into the process of selecting the trainee advisers and trainee social entrepreneurs;
- The principle of reconciling family and professional life for women has also been respected, so women who wished to become social entrepreneurs had a flexible and effective form of work.
DP name: PEIRAN
DP ID: GR-200917
Contact: Nicos Gavalakis
Tel: +30 210 382 0175
Fax: +30 210 382 0176
Project website: http://www.peiran.gr/2/3629.scr?current_menu_language_id=2&block=0&data=