Franchised Health Care: Could a Small Business Model be the Solution to Africa’s Woes?

cfwshops.jpgThere is a fundamental flaw with most humanitarian aid efforts: they are, at best, short-sighted. Wealthy Country A swoops into Impoverished Country B during a time of crisis. Country A spreads food, medicine, drinking water and money. Country B goes through all of these resources quickly. Country A leaves. Country B is still poor, hungry and tired.
In recent years, however, the goal of most foreign aid programs has been to develop long-term and sustainable systems for the dissemination of resources and knowledge to people in need. In other words, humanitarian aid has become development aid. International relief agencies such as Oxfam and CARE International have set up permanent field offices in developing countries, and have committed their charitable work permanently. The money to fund these offices, though, has to come from somewhere. And, in order for these environmentally and socially sustainable outfits to become financially sustainable, they will need to eventually generate a revenue stream to pay for their operations.
Enter Michael Seid, a wealthy American franchising expert, and Scott Hillstrom, an American businessman. Hillstrom has been a long time financial supporter of various African charities, but he eventually grew tired of writing checks and seeing no results. His solution: franchised healthcare. The franchise business model has been tremendously successful in America, with companies like MacDonalds and Burger King generating billions in profit. Observing this massive accomplishment, Hillstrom hired Seid as a consultant, and an idea was born.

The Child and Family Wellness Shops are chain of rural pharmacies and health clinics in Kenya. Seid firmly believes that the principles of franchising (standardization of product, process and philosophy) can be applied to development aid. The shops, known locally as CFWshops, have two main goals: to make generic and reliable drugs readily available to and affordable for rural Kenyan communities, and to use microloans and established franchise business models to create a group of motivated and educated Kenyan entrepreneurs. Each franchisee must pay a fee to open a pharmacy and must conduct many hours of training in public health and pharmaceutical expertise. Each CFWshop offers the same products and services as the next, creating public trust and establishing benchmarks in effective public health.
The franchise model has worked well for CFWshops because it is sustainable in the long-run. With each added franchisee comes increased revenue and a larger customer base. There will always be community members in rural African communities that want to make a difference while turning a profit. And CFWshops is, undoubtedly a for-profit company, says Reid: “we’re not on a mission from God, we’re on a mission from commerce.”

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8 responses

  1. Interesting article. It’s good to know of an in-country sustainable, business model that addresses the needs of the community as well as engaging entrepreneurial citizens. Well done Ms. Greenberg!

  2. Interesting article. It’s good to know of an in-country sustainable, business model that addresses the needs of the community as well as engaging entrepreneurial citizens. Well done Ms. Greenberg!

  3. A recent tv piece on CFWshops showed them to be thriving financially, as well as providing their communities with an important service. I’m glad to see this article in print! Franchising is an intriguing new approach that should be explored further.

  4. Refreshing article. A seasoned reporter Ms. Greenberg must be to capture such an intriguing story within a straightforward perspective.

  5. Thank you Ms. Greenberg for you insights into a long-standing and often misunderstood problem. Perhaps a solution is close at hand.

  6. What a unique perspective on the potential solution between connnecting lack of healthcare and the need for sustainable economic growth. I really enjoyed this article.

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