Franchising reproductive health services

Clinic franchising occurs when service delivery points contribute equity and resources of their own in exchange for the right to offer a defined set of health services of a franchiser for a perceived market advantage or to pursue a common social mission (Commercial Marketing Strategies 2002; Marie Stopes International 2002). Clinic franchising is being implemented in a number of developing countries as a mechanism for improving access to reproductive health services. Franchises exist in a variety of forms involving different franchising organizations, types of providers, and variations in contracts or other ownership arrangements. While there is evidence of a growing market share for private sector suppliers of primarily nonclinical contraceptives, there has been a less systematic evaluation of the effects of clinic franchising programs in developing countries. This article examines the associations between franchise membership in Pakistan, Ethiopia, and India and both health establishment and client level outcomes. An understanding of clinic franchising programs can provide information about their effectiveness and efficiency within given resource, market, and consumer demand environments, and inform the future development of clinic franchising programs.

The concept of applying commercial franchise procedures to health services has its roots in contraceptive social marketing programs, which aimed to increase awareness of family planning, improve availability and accessibility of contraceptive supplies and services, and promote cost recovery from retailers and fee-paying clients through the application of commercial strategies to the promotion of contraceptive methods (Harvey 1991; Population Services International 2002). Clinic franchising, however, extends the principles of social marketing programs to services, that is, service marketing. Franchised clinical services support long-term contraceptive methods and broader reproductive health care and require the participation of trained health providers. Networks of providers, or franchisees, are service producers in the clinic franchise system; they create standardized services under a franchise name (Foreit 1998). The result is a network of service providers offering a uniform set of services at predefined costs and quality of care. This standardization and identification of services, rather than just products, with the franchise name or logo, combined with contractual arrangements between providers and the franchising organization, distinguish clinic franchising from other social marketing programs that include provider training. At the same time, the social marketing version of franchising differs from commercial franchising in that franchisers and donors, instead of franchisees, bear the financial risk involved in setting up a site or establishing services (Smith 1997). Two forms of clinic franchising currently exist; the fractional model in which franchise services are added to an existing practice, and the stand-alone model in which in a practice is established to provide exclusively franchised supported services (Smith 1997). Franchising organizations in developing countries have different levels of business and management expertise, and donors may or may not invest in these capacities (Dmytraczenko 1997). Additionally, the management styles involved in franchising range from active monitoring and control, that is, second generation franchising, to a more hands-off approach where franchisers merely offer providers a territory and permit them to use the franchise name within their guidelines, that is, first generation franchising (Smith 1997). Considerable variation also exists in the requirements franchising organizations establish for providers entering their networks; some franchisers have established preferred criteria for franchisee selection based on motivation, business skill, past business success, ties to the community, and personal characteristics, all in order to improve retention and increase franchisees' chances of success (Smith 1997; Arangho 1989).

Joining a franchise can give providers access to new expertise and capital and allow them to replicate a successful model of service provision quickly. Franchisees join a network with a range of objectives and social commitment levels. Potential benefits to a franchise member include opportunities for training, increased clientele and revenue, the opportunity to open, sustain, or expand a practice, and the opportunity to expand the range of services offered. In return, franchise members must pay a franchise fee and maintain certain standards of quality determined by the franchise agency. The continued participation in a franchise network is thus determined by the extent to which the benefits of membership outweigh the costs of membership. The presence of a franchise fee and the potential for improvements in health service provision should act to sustain commitment to the franchise network. At the same time, however, mandated franchise fees in a low-demand setting may compromise a franchising organization's ability to establish a large network of service delivery points; in very low-demand settings it may be possible that the cost-recovery from franchised family planning services would not outweigh the cost of franchise membership.

Clinic franchising programs in low-income countries tend for the most part to be donor funded and are often targeted to specifically address the health needs of poor or low-income populations, or have a particular geographic focus, limiting their operations to urban areas or remote rural areas (Dmytraczenko 1997). In countries with low contraceptive prevalence and nominal private sector involvement in family planning, provision franchising organizations are quite sensitive to the affordability of their services and, as such, contraceptives are priced low and, unlike other pharmaceutical products, they usually do not generate a substantial share of a health practitioner's income. Responses to price increases are more significant among the poor, and those in less developed countries are thought to be willing to pay only about one percent of their annual disposable income for family planning (Jensen et at. 1994; Schearer 1983). Monitoring client income levels is therefore essential both for ensuring affordability and for cost-recovery efforts among donor subsidized franchisers (Harvey 1991).

Franchising organizations commonly brand providers in their networks with their name, logo, and products and services, which often includes a uniform clinic appearance (Cisek 1993). One potential benefit of franchise membership may be access to increased promotional opportunities. Promotion, particularly mass media advertising, is generally too costly for an individual provider; when conducted by franchising organizations, pooled resources can enable providers to reach wider audiences using multiple forms of media (Anderson 1985; Janowitz, Measham, and West 1999; Jato et al. 1999; Field Briefings 1992). Clinic franchising programs may encourage providers to form ties with their communities and promote family planning among existing clients (Turner 1992). Other potential benefits of franchise membership include opportunities for state-of-the-art training or higher client volume for other services, in exchange for providing contraceptive products and services at low cost. Expanding the range of services and choice of contraceptive methods and introducing methods previously unavailable in an area are means by which to increase contraceptive use and recover a share of service costs (Suyono 1989). Some franchise programs support broader reproductive health services, both for their direct health benefits and for their potential to increase client volume and sustainability of provider participation. Integration with other valuable and often more profitable services helps to draw in medical providers and improve credibility in the community (Stewart, Stecklov, and Adewuyi 1999), although care must be taken not to neglect the less lucrative family planning services in favor of the more profitable medical services (Dmytraczenko 1997).