Franchise Model Takes On Infectious Disease in Africa

The latest What Works case study from NextBillion looks at a business that is fighting infectious disease in Ghana by providing much-needed health care to the base of the economic pyramid.

In April 2002, Ghana Social Marketing Foundation (GSMF) founded CareShop as the first project of GSMF’s wholly owned for-profit subsidiary, Ghana Social Marketing Foundation Enterprises Limited (GSMFEL). CareShop is a franchise of licensed chemical sellers (retailers of over-the-counter drugs) designed to improve the quality, accessibility, and affordability of essential medicines across Ghana on a for-profit basis. CareShop uses market forces to improve health outcomes across the country and seeks an alignment of interests across franchisors, franchisees, and patients.

While Ghana’s health care infrastructure includes a multitude of public, NGO, and private institutions, the private sector is often better suited to meet patient demands, with far greater geographic accessibility throughout the nation and more consistent availability of essential drugs. Roughly [65 percent] (http://www.psp-one.com/files/2685_file_wB_ppp_paper_Marek_et...) of all treatment seeking behavior in Ghana occurs in the private sector. The first point of care is often a drugstore run by a licensed chemical seller (LCS), and stocked with the most common over the counter medications.

LCS are not always structured or regulated to provide the quality, accessibility and affordability that patients require, especially in rural areas. LCS lack standardization, and while they are an indispensable part of the health care system, some also present a threat to public health through the provision of incorrect, expired, substandard, or counterfeit drugs.

CareShop unifies and standardizes the fractured LCS sector in Ghana through conversion franchising. Individual franchisees operate as profit centers, contractually bound by clearly defined, strict regulations on diagnosis, quality, and pricing of a specific list of drugs. When properly functioning, the CareShop franchise makes it more profitable to comply with government and franchise regulations than to break them.

Over CareShop’s five-year history, it has made great progress in building its network and business, but has also faced formidable challenges. Today, its network of 276 franchisees continues to operate, but the franchisor, GSMFEL, has failed to turn a profit.

For more, read the complete case study.