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Case
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Reference no. SKS183
Spanish language
Subject category: Entrepreneurship
Published by: Social Enterprise Knowledge Network
Originally published in: 2021
Version: 6 September 2021
Length: 19 pages
Data source: Published sources

Abstract

This is a Spanish version. Propais is a non-profit organization founded in 1994 in Bogota by the public and private sectors and supported by 76 partner organizations. In October 2018, Maria Lucia Castrillon, general manager of Propais, was concerned about the future of the micro-franchising project (MFP) that had been active since 2012. The MFP was core to Propais's mission of promoting 'the development of micro and small businesses through strategic work, carried out jointly by public and private agents'. It promoted the creation of 70 new enterprises that generated 350 direct jobs and produced over USD1 million in annual sales. The IDB-MIF, a co-financer of the project with a total investment of USD2,540,150, had recently announced its decision to withdraw in May 2019, generating great uncertainty about future feasibility. Propais had invested time and money to become a reference point in franchise structuring. Without MFP support both franchisers and franchisees could lose the opportunity to do business, and the potential would be lost to create five direct jobs at each franchise. Two options to keep the project going were: 1) Propais could continue to manage the project but would need new financial resources from donors and investors, and 2) Propais could transfer its knowledge and processes to its partners (such as the Ministry of Commerce, Medellin Chamber of Commerce, private foundations or companies) so that they could in turn scale up the micro-franchise model. However, both options implied a long negotiation process and IDB-MIF support would end in just seven months. Moreover, Propais did not have enough resources to support the project alone during a transition. Universidad de Los Andes' case collection

Geographical setting

Region:
Americas
Country:
Colombia

About

Abstract

This is a Spanish version. Propais is a non-profit organization founded in 1994 in Bogota by the public and private sectors and supported by 76 partner organizations. In October 2018, Maria Lucia Castrillon, general manager of Propais, was concerned about the future of the micro-franchising project (MFP) that had been active since 2012. The MFP was core to Propais's mission of promoting 'the development of micro and small businesses through strategic work, carried out jointly by public and private agents'. It promoted the creation of 70 new enterprises that generated 350 direct jobs and produced over USD1 million in annual sales. The IDB-MIF, a co-financer of the project with a total investment of USD2,540,150, had recently announced its decision to withdraw in May 2019, generating great uncertainty about future feasibility. Propais had invested time and money to become a reference point in franchise structuring. Without MFP support both franchisers and franchisees could lose the opportunity to do business, and the potential would be lost to create five direct jobs at each franchise. Two options to keep the project going were: 1) Propais could continue to manage the project but would need new financial resources from donors and investors, and 2) Propais could transfer its knowledge and processes to its partners (such as the Ministry of Commerce, Medellin Chamber of Commerce, private foundations or companies) so that they could in turn scale up the micro-franchise model. However, both options implied a long negotiation process and IDB-MIF support would end in just seven months. Moreover, Propais did not have enough resources to support the project alone during a transition. Universidad de Los Andes' case collection

Settings

Geographical setting

Region:
Americas
Country:
Colombia

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