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During his travels in Africa exploring the impact of microlending on business start-ups, Jason Fairbourne noticed something strange. When an entrepreneur became successful selling a particular product, say tomatoes, many others would mimic that person's business. Soon the local market was flooded with tomatoes, and failed tomato vendors.
"I would go village to village where everyone is selling the same product," said Fairbourne, a Springville-based consultant. "They are doing a business out of necessity, in order to feed their family, not because they are entrepreneurial and have the next big idea. It's a bit presumptuous to give someone financing and assume they will be successful."
Out of this, the part-time Brigham Young University faculty member hatched his concept of "microfranchising" to address pitfalls associated with the microlending movement. His idea was to put ready-made businesses in the hands of people with no entrepreneurial skills in impoverished communities that lack business-support infrastructure.
"Maybe they had a good idea but they didn't have the acumen sufficient to run a small business, to do basic bookkeeping and tracking of their sales," Fairbourne said. "They know they are selling products, but most don't know their actual profits. They don't keep records, they don't know."
Fairbourne's solution was to investigate a local market, identify products, craft brand identities, then package businesses in an easy-to-replicate model that could be operated without an MBA, or even basic literacy in some cases. He has helped assemble franchises in several countries in South and Central America, Asia and Africa.
So many people in poverty need the hand up that something like microcredit provides but often these 'necessity entrepreneurs' lack entrepreneurial skills (just like many of us in the same position would lack). Microcredit and programs like it help them succeed as high as their innate skill level can take them, which is powerful to so many hundreds of millions in poverty, said Todd Manwaring, director of BYU's Ballard Center of Economic Self-Reliance, in an e-mail commenting on the program.
"Microfranchising takes away the creative and entrepreneurial requirement and gives these microbusiness people a product, provides systems to manage their business, so it helps these fledgling microbusinesses start quicker, grow faster, and brings greater income," Manwaring said.
Franchising has worked in the United States, Fairbourne noted, helping countless nonentrepreneurial business owners on the path to success. Today, franchising accounts for $1 trillion in sales, supporting 8 million U.S. jobs, according to one of his presentations.
His ideas for global microfranchising have won him a new social entrepreneur research fellowship, named for California businessman Richard Peery. The Ballard Center, a division of BYU's Marriott School of Management, administers the fellowship.
Supported by the Peery Foundation, Fairbourne's fellowship and associated grant allow him to further develop microfrancishing both as an idea and as a practical means of pulling communities out of poverty.
"His work is well-aligned with our foundation's mission to encourage self-reliance for youth and families in poverty," said Dave Peery, executive director for the Bay Area-based foundation. "As philanthropic investors, we look for innovations and models that can transform the lives of thousands, if not millions, of people. We believe microfranchising has that potential."
Fairbourne grew up in Bountiful, but didn't go to college out of high school. Instead he skied, traveled and lived a life of outdoor adventure for several years. His outlook changed during a trekking trip to the Himalayas, where he befriended children on the streets of Katmandu.
"I would teach them math and English, and they just ate it up. That's when I had an epiphany. I could do whatever I wanted, and I'm throwing it away," said Fairbourne, 37.
He returned to Utah and earned his bachelor's degree at Utah Valley State College (now Utah Valley University), then a master's in development management at England's London School of Economics. Back in Utah, he was a guest lecturer at the Ballard Center and developed microfranchising, giving it a name and some scholarly credibility. He wrote the book MicroFranchising: Creating Wealth at the Bottom of the Pyramid and published articles in academic journals. And traveled.
While conducting his research, he came to a know Fati John, a businesswoman who lived in a rural area outside the Ghanan city of Tamale. She cleared just $50 a month on her food-vending business supported by a traditional microloan enough to pay back her loan but hardly enough to thrive.
A mother of four in a polygamous marriage, she worked 16 hours a day. The aspiring businesswomen in the village selected John to be the community's sole franchisee for a retail business opportunity Fairbourne was making available, retailing four lines of personal-care products. In her first month, John cleared $200 and is now averaging $20 a day, while working fewer hours and sending her kids to school, according to one of Fairbourne's presentations.
The Peery Fellowship
R The Peery Foundation is a Palo Alto, Calif.-based family foundation established in 1978 by Richard Peery. Its mission is to strengthen youth and families to build lives of dignity and self-reliance by investing in and serving social entrepreneurs and other leaders who are working to empower youth and families in the San Francisco Bay Area and around the world.