Earth Day-- What's that got to do with Franchising?

Franchising and Earth Day

April 22nd is Earth Day. It is many people’s (and of course, mine, too) wish that governments, business and society all share a growing ambition to create a more sustainable and prosperous future for people and for our planet, while recognising the challenges at play.

It is important to note that consumers, especially Millennials and Gen Zs have woken up to the urgency caused by climate change.?They want to see authentic, tangible actions, not greenwashing gestures. And consequently, consumers are willing to pay a premium for a product that has a visibly sustainable supply chain.

Cases in point: Mainland China’s only sustainable fashion award, which officially kicked off on April 21, 2022, as R.I.S.E, Sustainable Fashion Lab (2nd Edition). Another is : Reuters Events: Responsible Business Awards 2022?, covering environmental issues in 4 categories, invite companies to showcase their ambitious investments and innovations in critical areas. And yet another: March 2nd, 2022, the UN Environment Assembly passed a resolution to forge a globally binding agreement by 2024 to End Plastic Pollution. Global brands like Unilever, Mondelez, Mars and Nestle all supported the treaty and will now have to drastically limit their plastic emissions.

So, will franchise companies, be it franchisor or franchisee owned/operated, help shape a future that is planet-positive? And by extension, going under the ESG (environmental, social, corporate governance) umbrella, how can all of us support a fairer society where everyone (if not the majority) can thrive? Will franchise businesses choose to be a Company of Good, both for themselves and the communities they serve?

Company of Good (https://www.companyofgood.sg) connects organisations to do good strategically, sustainably and?impactfully.?Through its initiatives, like-minded organisations can learn, network and collaborate for?good.?“ Creating a strong business and building a better world are not conflicting goals. Rather, they are both?essential ingredients for long-term success. At Company of Good, we help organisations to do good,?and to benefit both their business and the community while doing so.”

Major global brands, such as McDonald’s and Subway, have committed to responsible sourcing of suppliers, environmental initiatives to reduce carbon emissions and packaging, and sustainability of their operations. At a local level, by engaging with social responsibility initiatives, McDonald’s franchisees have effectively become brand ambassadors within their local communities by supporting young people through sponsoring grassroots football and helping the environment by organising local litter?pick-ups.

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Other franchisors are now recognising the benefits of putting social responsibility at the heart of their business operations and promoting it at a local level. “Nowadays, prospective franchisees are looking for more than just money and the ability to help something bigger than just their business is always attractive,” says Carl Reader, non-executive director at the British Franchise Association and author of?The Franchising Handbook.

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Since franchising is analogous to cloning (replication of the same) of a proven business, franchisors need to ensure that they choose franchisees that share the same values and aspiration so that the former’s ESG plans are not sabotaged wittingly or otherwise by the wrong franchisee.

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Research has shown that millennials are interested in business ownership, active in their community outside work and view changing the world for the better as a serious goal. Franchisors hoping to attract this next generation of franchise owners will need more than just a strong business concept with sound financial prospects.

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For example, within the F&B industry, more consumers are asking for ethically sourced products, supporting local farmers or producers, and looking for meat alternatives. Whereas in the auto industry, some consumers are now expecting the more traditional brands to focus on and produce more hybrid or full-electric alternatives to combustion engines. Example: https://www.oyika.com/

If there’s another word for ‘do good’, it’s probably “do no harm”. Social responsibility in franchising creates a win-win situation; greater brand awareness for the franchise and greater exposure for the local community cause or charity they support. It also creates a positive opinion of the franchise in the eyes of customers.

Common-sensibly, of course, it is important that the right social issues are focused on and that activities are consistent with the overall brand?image. Piecemeal efforts may be seen as inauthentic and just a ‘marketing ploy’ rather than something genuine. Both franchisors and franchisees need to see these do-good activities as a long-term investment and strategy,

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A recent global survey by Google Cloud https://cloud.google.com/blog/topics/sustainability/new-survey-reveals-executives-views-about-sustainability found that 74% of APAC executives believe that?sustainability can drive significant business transformations.. Many identify ESG initiatives as their top organisational priority, ranking ESG on par with business model evolution and customer relationship and experience optimisation.?From a Feb 2020 study by Forrester, consumers prefer brands that stay true to their values. (https://www.forrester.com/blogs/the-power-of-the-values-based-consumer-and-of-authentic-brand-values/ ).

Sustainability has become one of the few topics of focus in recent times and many brands have begun walking the talk by launching a slew of initiatives and campaigns in conjunction with Earth Day to encourage more responsible consumption.

McDonald’s: McDonald’s Green & Good store adapts a modular system with its prefabricated prefinished building construction. The store is built with repurposed and recycled material such as reclaimed wood, eco- pavers, and eco-bricks. Concrete fibre was used as an alternative material to steel rebars on slabs, pavements, and driveways. Even smaller details such as paint used made with low volatile organic compounds were prioritized with less environmental impact.?

Hugo Boss: Hugo Boss is set to launch its premium resale platform in the third quarter of the year, where customers can buy pre-owned Hugo Boss items. These items will be curated by the brand from clothing that has been traded in by existing customers. The resale platform can be accessed through the brand’s online store and will launch first in France, with plans to expand to Germany, the UK and the US in 2025. In wider sustainability efforts, Hugo Boss will also launch a care and repair service in selected German stores later this year, with more key markets to follow. The service will cover the repair of suits, jeans, shoes, jersey products, and leather goods, to ensure the longevity of customers’ Hugo Boss items.

IKEA Singapore : IKEA Singapore partnered with Carousell to launch?a Second-hand Showroom at IKEA Tampines, in celebration of Earth Day. The month-long physical showroom in IKEA Tampines will feature preloved IKEA items from influencers such as singer-songwriter Nathan Hartono, Tiong Jia En, Munah Bagharib and even Carousell (https://www.carousell.sg/) co-founder Marcus Tan from?21 April to 30 June 2022.?These items will also be listed on Carousell until 8 May 2022, where users can stand a chance to win these items by sharing the best reasons for why they will make a good next owner for the product, on the listing's comments. The partnership will also have an incentivised programme rewarding customers for buying and selling second-hand items and aims to make?a sustainable and zero-waste lifestyle more accessible to consumers. This move follows a statement by IKEA, that affirms its commitment to being "circular" and climate positive by 2030.

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Conclusion. Personally, I believe in finishing well. I am of the opinion that, even if others think the little efforts we put in to save the environment, or to do good is insignificant, remember the fable of the small boy who picks up starfishes washed up onto the beach… To every individual starfish that the boy threw back into the sea, it gets another chance to live. And the sea is all the more beautiful and vibrant with the starfishes in it.

Albert is the Founder/CEO of Asiawide Franchise Consultants. He has more than 33 years of franchising experience, of which 11 were as a master franchisee of a UK-based franchise consulting franchise. His achievements: he and his team have helped over 1300 companies in over 10 Asian countries in building franchise packages & related consulting work (market entry, finding business partners, enforce contractual terms, etc.) ; he has built a network of over 70 strategic partners in over 50 nations, of which 2 are his franchisees; he’s a board member at many franchise-related bodies including the World Franchise Council, Asia Pacific Franchise Confederation and Franchising & Licensing Association, Singapore; He’d been awarded numerous awards by various national franchise associations & other organizations; he’d spoken in 47 nations over 300 occasions; he’d co-authored Developing and Managing a Franchise (LexisNexis) and contributed to many publications and social media on franchising; He’s the Editor-in-Chief of Asia Franchise & Business Opportunities ,English-Chinese bilingual magazine (now fully digital) since 1994. https://www.dhirubhai.net/in/albert-kong-b145b1; Facebook albert.kong.792; WeChat xinjiapoJiangJinXing; [email protected]?