Tender Funerals is structured as a social franchise, with Tender Funerals services operating as social franchisees of Tender Funerals Australia. With the concept of social franchising still fairly new in Australia, we’re often asked what this means, how it works, and why choose social franchising as a model for growing a social enterprise?
Social franchises operate like commercial franchises but with the aim of achieving social purpose rather than profit. The International Centre for Social Franchising (now called Spring Impact) identifies four key elements of social franchising:
1. Ownership – empowered franchisees who feel ownership of their organisations and are highly motivated for them to succeed.
2. Process – having systematised processes but with enough freedom to adapt to the local context.
3. Enhanced network – a network of knowledge, data and innovation shared between franchisees and the franchisor.
4. Name and brand – a recognised brand proposition.
These elements are core to the Tender social franchise model.
A challenge in developing our model was that there is no specific legal framework for social franchising in Australia. This meant we had to develop a bespoke franchise agreement in accordance with the Franchising Code of Conduct which enshrined, promoted, and protected our social purpose.
While Tender Funerals services are community owned and led, our franchising agreement binds sites to operate in accordance with the Tender Credo, Vision Statement, business model and manual, with the common aim of ensuring that people in financial need can access affordable, customisable funeral services. Under the agreement, Tender Funerals Australia provides sites with key intellectual property, capacity building and specialised training.
Core to developing our social franchise model was the Tender Network. The Network meets monthly to share information and lessons learned, discuss challenges, and jointly develop solutions. As a community-led model built on community development principles, active participation in the Network is a pre-requisite for Tender Funerals sites.
We have learned many lessons in structuring Tender Funerals as a social franchise. It’s critical to first have a viable social enterprise and to prove the soundness of the model before looking to grow or scale. The relationship between the franchisor and franchisee is important, and can be different to a commercial franchising relationship. For example, as the work of start-up only has to happen once for each site, it makes sense for Tender Funerals Australia to play this capacity-building role for all the sites. And we’ve had to give thoughtful consideration to potential revenue streams for both Tender Funerals Australia and the sites when setting the amount and structure of the franchise fee. Lastly, it takes time – it was a nearly two-year process from the initial idea to signing our first franchise agreement.
So why did we do it? Given our mission, our model, and the level of interest we’ve had from communities around Australia in starting their own Tender services, social franchising just made sense. In the words of one of our franchisees, “it means we will have the same value of consistency as the Network broadens over a larger area. It’s building peoples’ faith and trust. It’s not just people experiencing a better funeral – this will inform every funeral they ever have. With a social franchise it’s a human service, not just a business.”