Franchising is increasingly used by healthcare providers around the world to share best practice and optimise financial benefits. Here are 10 tips on how to make it a success, by Mark Abell
Franchising, already used by many health service providers such as the Appletree Medical Group in Canada, Doctors Express in the US and Apollo Hospitals in India, is increasingly seen as a way to share best practice and even supplement public funding in the NHS.
The process involves the licensing of know-how by one party, the franchisor, to another, the franchisee, in exchange for an ongoing periodic financial payment. The franchisee undertakes to comply with qualitative key performance indicators, which the franchisor polices to ensure compliance.
Here are 10 top tips that NHS trusts should follow if they are considering franchising.
1. The know-how needed to be franchised is not about cutting edge clinical technology, but how a trust delivers its services
The franchisor’s “business format” – a blueprint for the successful delivery of the particular care pathway – should remove the need for it to develop its own format through trial and error and greatly increase its chances of success.
It should be used to replicate best practice within the NHS, ensuring medical services are managed and delivered in the most efficient, cost effective and patient oriented manner possible. For example, it could be used to ensure cardiology units are run to a uniformly high standard, and so help to ensure the delivery of a high quality care pathway in accord with its KPIs.
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2. To get the best out of franchising, become both a franchisor and a franchisee
Do not fall into the trap of thinking that franchising in the NHS has to be a one way street, as it is in commerce.
‘The more franchisees a trust attracts, the greater the income it will generate’
The use of open ended, peer to peer social franchising will enable you to provide your best practice solutions to other NHS trusts, while at the same time gaining access to the best practice solutions of others.
No one trust has the answer to everything; most trusts have something of value to share with others. This collaborative mutualisation will greatly improve the efficiency of the NHS, reduce waste and duplication, and spark a race to the top by trusts to achieve the best patient care and financial performance.
3. Be clear and focused in the know-how you are going to franchise
Do not be too ambitious. Identify key solutions to key problems and franchise them. Deep rather than broad is the way to go.
‘Franchisor trusts need to develop the ability to transfer their know-how to their franchisees’
The know-how must deliver a demonstrable benefit. The more specific the benefit, the more easily demonstrable its desirability is.
Remember, you will be competing not only with other trusts that have potentially similar know-how; due to limited budgets and the need to prioritise, you will also be competing with trusts offering totally different solutions to different problems.
Potential franchisee trusts may not be able to afford to take on several franchises at the same time so they will have to prioritise. They will be calculating which franchise will give them the best and most easily demonstrable return on investment. The more franchisees a trust attracts, the greater the income it will generate.
4. Make sure your know-how is clearly identified and easily replicable
Your know-how cannot be fuzzy. Also, it cannot rely on the skills of an individual. It has to be a blueprint that any reasonably well resourced trust can implement.
This not only makes the know-how a more valuable and marketable commodity, but also means it will be far easier for you to monitor and support.
5. Ensure you are fully resourced
Franchisor trusts need to develop the ability to transfer their know-how to their franchisees. This may involve incurring costs and acquiring new skill sets through recruitment. These should be covered by the income streams generated from franchisees.
6. Be prepared to monitor the ongoing performance of your franchisees
You must ensure that they comply with the relevant KPIs. Rigorous auditing of the franchisee’s performance is an essential part of quality assurance. Again, this may involve the acquisition of new skills.
7. Continuously develop your know-how
This is essential to ensuring it continues to add value to the franchisee and so retains, and increases, its value. It must continue to be best of breed – do not allow it to fossilise and become out of date.
8. Take expert advice
Peer to peer franchising is a highly specialised area of law. The stakes are high, so invest in the appropriate legal expertise from people with a proven track record in social franchising.
‘Franchisees may be able to help you further improve your know-how through sharing their experiences’
Advisers with experience of social franchising, as well as experience of more commercially focused franchising and a sound knowledge of the way that the NHS works, can help ensure projects are properly planned and structured from the outset.
9. Communicate with your franchisees
Listen to what they say. They may be able to help you improve your know-how through sharing their experiences of using it. Ensure that they are happy and feel that they are deriving real value from the franchise.
10. Explore franchising to healthcare providers in other countries
It is worth considering how franchising structures developed to share excellence within the UK might facilitate the transfer of know-how across borders.
Mark Abell is a partner at Bird & Bird