Microfranchising to Alleviate Poverty: An Innovation Network Perspective

In 2015, the United Nations Sustainable Development Goals set an ethical imperative: end extreme poverty and hunger by 2030. Microfranchising can contribute to this critical effort by offering nonprofit organizations and businesses an opportunity to rapidly scale entrepreneurship within Base of the Pyramid (BOP) markets. However, while abundant literature exists on traditional franchising, we know little about how to leverage microfranchising in resource-scarce contexts to alleviate poverty. To address this gap, we report a longitudinal case study of a microfranchise network aimed at providing timely access to quality, affordable agricultural input, and services for millions of small-scale farmers in Bangladesh. Anchored in the BOP and microfranchise literature and drawing on innovation theory as an analytical lens, we provide a detailed account of how CARE—a global humanitarian and development non-governmental organization—developed and managed the network. We found that context played a strong role and that adaptability therefore was key to successfully recruiting and engaging BOP entrepreneurs and other business partners in the network. Moreover, as members joined the network with past ties and established practices, managing these path dependencies had important implications for network performance. Network sustainability in terms of financial and social impact was also a key theme that required careful consideration throughout network development. We combine these empirical findings with extant literature to discuss contributions to the theory and practice of microfranchising and innovation networking in the BOP context.