Reverse Franchising Telecenter

[Marco Figueiredo]

I am playing around with a concept I am calling Reverse Franchising Telecenter. Despite the intriguing name, the idea is very simple: any organization managing a network of telecenters, be it for-profit, not-for-profit or government owned, shall operate in the same dimension of a traditional franchising organization, however franchisees do not pay royalties to the franchiser. Much on the contrary, the franchisee receives a percentage of the network services the franchiser offers to outside customers.

One can call this a distribution channel, or a chain of representatives. But the fact is that unless the network organization provides the complete package (technology and business) that allows the franchisee to operate efficiently (self-sustainable), this model can not work. And the business model that better resembles this envisioned infrastructure is the traditional commercial franchise model.

In the Reverse Franchising model, however, the franchiser's income comes from the sale of network services to global customers. The larger the telecenter network the better able the franchiser is to sell more services/products. The individual telecenters serve their communities and whatever income they receive locally, stay local, and for all services provided to global customers through the franchiser, the telecenter receives a percentage of the income. This brings money from outside the community and helps build wealth locally. Most global products will be information brokerage, advertising, and facilities/equipment rental.

I intend to extend on this idea on blog posts and eventually a paper. I welcome your comments as I present more details. I have been working on telecenters since 2000 and am personally involved in the development of telecenters in the for-profit, not-for-profit and government arenas. There is a lot to talk about in terms of types of services and products both local and global, franchisee training, social networking, finance and accounting, e-money, franchise management systems, computer architectures, operating systems, application software, wireless internet, VoIP, video blogging and citizen journalism, e-commerce, e-learning, etc... There is a need to build a new ecosystem to enable the reverse franchising model. An open source approach might provide a faster evolution path for global adoption.

In short, I believe the reverse franchising model to be the most effective way to tie together all the elements of a telecenter network and make it self sustainable and scalable, and for some, profitable.

[Marco Figueiredo]

Hello Bakta,

Good to hear from you all the way from Nepal. I have a good friend there, Bal Joshi, who runs Thamel.com. Here is a good article from Bal: http://www.nextbillion.net/blogs/2006/12/06/diasporas-for-development-the-remittance-platform

Bal is well connected in the international development community. You might want to engage him in your efforts in Nepal.

Marco

[Marco Figueiredo]

Hi Miguel, I am aware of OneRoof and admire your work. I talked to Dwight Wilson when One Roof was being created. Good luck to you guys and keep us posted on your developments.

There is a primary difference on what I am proposing in the Reverse Franchising Telecenter model and the traditional franchise business, and that is that franchisees do not pay royalties to the franchiser. To me that is key to make the model scalable in low income communities and also make it applicable in government, NGO and for-profit arenas. The idea is to have s single model that applies to all so we can collaborate in the development of the common elements and reduce the barriers to entry. Let me give a few brief examples in each approach:

Government: In general, governments utilized current infrastructure to provide public access to ICTs. For example, in Brazil the Mail Service provides some kind of public access to the Internet in their stores. And so do many other government agencies in a totally uncoordinated fashion, i.e., they use different software, user interfaces and price models. And every one of these projects lack training not only for the store operators but for the end customer as well. Using the Reverse Franchise Model, the Brazilian Mail Service would establish a central unit responsible for creating and managing the Public Access to ICTs in their stores, which would include training the operators on a package that is shared by other government agencies. This unit could be sustained by the sales of network services while the individual stores may sustain their operations through local services plus a percentage income from the network services. While cooperating with other government agencies, NGOs and the private sector in creating a shared infrastructure to build and maintain the growth of the Reverse Franchise Telecenter model, the government agencies reduce cost and support the growth of the telecenter ecosystem.

NGOs: The greatest benefit for NGOs in using the Reverse Franchise Telecenter model is the ability to leverage on a central open source repository of tools to build their networks of telecenters. The model fits perfectly the NGO way of doing business as they normally raise philanthropic funds and direct them to low income communities. NGOs are more than willing to see funds always going to the low income communities and not the other way around. And donors will appreciate investing on a model that builds self sustainability in the cells and networks, and shares common solutions with governments and the for-profit private sector.

For-Profit: It takes a lot of resources to build the ecosystem that enables a profitable telecenter franchise operation, and it takes lots of units (thousands) to build a profitable network operation that will attract investors in a for profit operation. That leads to many years of non-profitable operation and stressful relationships with investors. And the market is just enormous, billions of people craving for Internet access. Leveraging on a common base reduces startup costs and brings the company to profitability faster. While many might see the competitive disadvantage of using a common base as a deterrent to investment, I'd say the advantage could be build out of efficient management of the network, sales of network services through established business connections, and the selection of savvy franchisees. Start in more populous areas and build partnerships with NGOs and governments to reduce competition and support complimentary services in less populous and potentially less profitable areas.

The bottom line is that I see the elements of the franchise model applicable and necessary to any operation, be it government, NGO or for-profit. And I am calling for an open source approach to develop a common base from where everyone can draw from and contribute to. What I am proposing is more than an effort of standardization. I am calling for the building of all the elements that make a telecenter franchise operation work well for all sectors.

Marco

[Bhakta Raj Ranjit]

Hello!



At present, Telecener could be praiseworthy tool while Nepal is on the process of writing a new Constitution. Nepal needs funds for
the program that buy hardware, software and human resources capacity
building for the establishment of Telecenter in rural and remote areas
of Nepal.

Therefore, I am grateful to you for your small attentions, supports and
exploring funding agencies. Your little time will change the
livelihood of rural Nepali.

It is not emergency but urgent.

I look forward to you.

Thanks.

Warm regards.

Bhakta Raj Ranjit
Chairprson
Synergy Nepal
Kathmandu
Email: [e-mail]

[Miguel Raimilla]

Dear Marco
check our website
www.oneroof.com
We are one the very unique Telecentre franchise model out there.

happy to exchange some more in the future

Best