Komosie is the biggest social franchise in Europe in terms of employment. It operates second-hand shops throughout Flanders, as well as energy-saving advice (energiesnoeiers). It is also developing activities in foodsaving.
European Social Franchising Network Case Study 1
At the time of writing, there are just under 60 social franchises in Europe employing over 13,000 people. This is one of a number of case studies produced by ESFN to demonstrate the impact social franchises are having across Europe, share learning and raise the profile of this important approach to growing and developing social cooperatives/enterprises. ESFN is a network set up by social franchises to support the development of social franchising across Europe. You can find out more at www.socialfranchising.coop. The production of this case study was funded by the European Commission as part of the Better Future for the Social Economy Learning Network of 7 national European Social Fund Managing Authorities.
KOMOSIE business model
KOMOSIE manages two social franchises operating in the fields of reuse and energy saving. One of these, De Kringwinkel, is the largest social franchise in Europe and possibly the world.
- De Kringwinkel is a federation of high quality, well designed and laid out shops selling used goods. There are currently 108 Kringwinkels, as the individual shops are called, operating across the Flanders region of Belgium.
- KOMOSIE’s second social franchise works with householders to reduce their energy consumption and is called Energiesnoeiers (‘Energy cutters’). These are 33 social enterprises that install small energy saving equipment (compact fluorescent lamps, radiator foil, water saving showerheads and so on) in private homes, and train and employ disadvantaged people to do this.
KOMOSIE is owned by a federation whose members are the 31 Kringwinkel organisations and the 33 Energy Cutter organisations in Flanders. The Kringwinkel organisations operate 108 shops under the Kringwinkel brand and ethos.
As well as having environmental impacts, the KOMOSIE franchises provide employment for disadvantaged people, with 85% having some form of disadvantage, such as long-term unemployment or disability.
Attached to the Kringwinkel shops are 8 Revise workshops which test and refurbish used white electrical goods such as fridges and cookers. These items are then sold in the Kringwinkel shops.
Unlike many social franchises, the business operation predated the formation of the franchise. In the early 1990s a number of second-hand shops set up to provide employment for disadvantaged people – at that time there were 14 organisations with 15 shops. However, they began to recognise that they were facing increasing competitive pressures and needed to speak with a common voice when talking to government.
They accordingly came together in 1994 as a federation (KVK – Koepel van Vlaamse Kringloopcentra) and from this set up KOMOSIE. With a three-year grant of €50,000 a year from a philanthropic foundation, they developed the brand of ‘De Kringwinkel’ which 65% of their members adopted on its launch in 2002. Now 95% of their second-hand shops in Flanders are branded De Kringwinkel.
Over time, KOMOSIE provided more and more support to those operating under the Kringwinkel brand. It developed a shop format to improve the shop layouts, provided marketing support, created quality standards and carried on a range of other activities. Although KOMOSIE did not recognise it as such at the time, they had effectively set up a social franchise with members paying KOMOSIE to manage the Kringwinkel brand and provide support to its members. This support transformed the impact of members and led to the rapid growth of the Kringwinkel brand. When KOMOSIE and the Kringwinkel brand was set up, the 39 organisations ran 93 shops with a turnover of €14.2 million and employed 1,831 people. Now they employ 3,861 people and have a turnover of €28.5. They have 3.6 million customers and have recycled 50,000 tonnes of waste a year.
So the Kringwinkel social franchise has had a major impact on the growth of its members and also helped it develop Energiesnoeiers as a new social franchise. The presence of KOMOSIE allowed the government to enter into dialogue about establishing an energy saving service at scale with a single point of contact. Furthermore, KOMOSIE came to the table with a proven working relationship with government that facilitated the establishment of Energiesnoeiers, which otherwise would have been very difficult or impossible.
The franchising system today
KOMOSIE manages the two franchises on behalf of its membership. KOMOSIE itself employs 12 people who provide a range services to members, including:
- Defending their members’ interests, advocating and lobbying on their behalf to government at all levels and other agencies, including the private sector
- A single point of contact for government providing a coherent coordinated voice
- Registration software for waste collection and reuse of materials
- Support in communication
- Logo & house style
- Public relations
- Shop layout
- Campaign and central website
- Support in total quality management (TQM)
- Training, workshops and learning network
KOMOSIE has become a leading exponent of TQM and is now using the expertise it has built up to provide consultancy services to other agencies. It is working with government on the development of TQM and its wider use.
KOMOSIE has developed a strong network that allows members to learn from each other’s experience, share and reduce costs, provide a bigger more credible brand name, and explore and develop new business ideas like Energiesnoeiers . KOMOSIE has thus become a major player in the environmental sector and in social enterprise more generally in Flanders. This has allowed it to compete effectively with the private sector and to grow.
KOMOSIE makes use of local and regional social employment programmes for low-skilled and long-term unemployed people. 27 of the 31 member companies of KOMOSIE are recognised as sheltered workshops. Both De Kringwinkel and Energiesnoeiers make use of these programmes. They are described as ‘social workplaces’ for people who have been long-term unemployed and/or have a one or more disabilities or mental health problems.
About 52% of KOMOSIE members’ income is from shop sales. The rest comes from local and national government support for the employment of disadvantaged people, other grants and contracts.
The Revise workshops repairing waste electrical and electronic equipment (WEEE) goods receive government support to employ people. In the case of the long-term unemployed, this is substantial at 40% of salary. The main work people do with KOMOSIE is:
- Kerbside collection/collecting from recycling centres of reusable goods
- Sorting, cleaning, making minor repairs and pricing the collected goods
- Staffing De Kringwinkel stores and selling goods
The overall impact of the KOMOSIE
The two social franchises have had a significant impact. De Kringwinkel branded shops employ 3,861 people, have a turnover of €28.5 million, have 3.6 million customers and have collected 52,027 tons of goods and by so doing saved 43,700 tons of CO2 emissions per annum.
Energiesnoeiers has enabled the start-up of 33 social enterprises or social franchisees, has created employment for 240 full-time equivalent posts (2010), is active in 250 municipalities, and is officially certified by the Flemish subsidy agency for work and social economy. All this has been achieved in two years using the experience and contacts developed through De Kringwinkel.
KOMOSIE and its two social franchises are now a well established part of the Flanders economy. De Kringwinkel covers all of Flanders and runs kerbside collections in every Flemish town. KOMOSIE is therefore not actively seeking to increase its membership and does not have a franchising prospectus. However, it does produce substantial manuals for the development and management of De Kringwinkel shops and Energiesnoeiers programmes as well as the Revise workshops. There is an agreement between all KOMOSIE-reuse centres and KOMOSIE about the municipalities they are allowed to do curbside collections in. Every municipality is served by only 1 reuse centre.
Funding the franchise
The KOMOSIE policy on funding has changed over the past years. KOMOSIE felt that their activities were developed in a way that placed too much importance on the needs of funders. Now all their core activities are paid for by membership fees. The fees paid to KOMOSIE by its social franchisees are based partly on the potential of an area they operate in and partly on how effective the franchisee converts this potential into actual income through the shops. Thus the franchisees pay KOMOSIE €0.004 per person living in the municipality they are licensed to operate in per annum (the potential), 0.5% of their shop turnover (the conversion of the potential) and 5% of any extra subsidy they receive from governmental environmental agency. This fee is capped to an upper limit. Apart from that, the franchisees also pay their share of the common advertising costs. They still have some project funding, but only for new ‘projects’: that is new activities, limited in time that develop new approaches and methodologies that can become part of KOMOSIE’s core activities.
KOMOSIE themselves have not received any ESF. However, some (about 10 – 15%) of their members do receive ESF funding for their activities. Some members have been involved in EQUAL funded projects and some have been, or are, engaged in INTERREG EU funded projects. KOMOSIE are part of an INTERREG project. The goal of this is to develop methods to better map the flow of goods within the reuse centres. These tools will be used both for measuring the flow of goods (eg parts lists and weighing protocols), the registration of the flow of goods (software and hardware) and the reporting of the results.
During the recent financial crisis, the second-hand market has grown. KOMOSIE have seen a growth in both the amount of materials they are able to reuse and recycle and in the number of people they employ. Last year they have thus managed to create 550 jobs and increase sales by 9%. KOMOSIE is a large well-established organisation and as such does not see a great deal of scope in increasing its membership, but sees its key role as increasing the services provided by its members and the number of disadvantaged people they employ. It has therefore set a target of 5kg of recycling per head of the population for 2015 and good progress is being made towards achieving this. KOMOSIE has considered expanding by applying its knowledge on networking, franchising, shop branding, TQM etc. in other countries, but as yet this has not been a priority.
Key success factors
As probably the biggest social franchise in Europe, KOMOSIE has, thanks to government investment in employment, been able to narrow the great gulf between disadvantaged people and the labour market. Its activities lend themselves particularly well to social employment because it can offer a wide range of work activities. At the same time, KOMOSIE has tackled climate change and thus created a more sustainable society in the economic, social and the environmental senses. Jurgen Blondeel of KOMOSIE commented: “Employment and CO2 savings go hand in hand – a positive message well received by the Flemish government.” Jurgen puts their achievements down to:
- A strong viable business concept
- A well known customer brand
- Continuous innovation of the business concept
- Advocacy on behalf of members and defence of their common interests
He particularly highlights a message relevant to all social franchises: “Cooperation makes you stronger: it has enabled us to cover all of Flanders.”
KOMOSIE – Koepel van Milieuondernemers in de Sociale Economie (Coalition of Environmental Entrepreneurs in the Social Economy)
Tel: +32 3 281 03 30
Fax: +32 3 281 73 30