Hapinoy: The Microfinanced Franchise Model
Sari-sari stores are make-shift local community convenience stores that serve the vast underprivileged majority of the Philippines. There are about 650,000 of them scattered around the nation and virtually all of them are individually owned. For years, ambitious local entrepreneurs have dreamed of consolidating this massive retail category. A bunch of them dreamed with a social conscience and are now finding success with a venture called Hapinoy.
Hapinoy seeks to become a “preferred business partner of the poor” by partnering with local microfinance institutions to provide women borrowers with top credit scores a Hapinoy sari-sari store franchise. Hapinoy provides value by serving as a retail consultant, brand marketer and merchandise consolidator (it deals with manufacturers directly). The company makes money by getting a percentage off the merchandise, which ties its long-term interests with each individual store’s sales growth and inventory turnover. Because of the network effect and economy of scale achieved by being under one Hapinoy brand, store owners still end up with higher margins compared with traditional unbranded sari-sari store owners.