The Children’s Miracle Network model is one of innovation and the epitome of how a successful non-profit can be managed and executed to deliver amazing results to people who need it most. Children’s Miracle Network originally started in 1983 as a way to provide funding for hospitals that worked primarily with children. These hospitals were located across the U.S. and Canada and over time grew to over 170 locations with great medical facilities and really set the standard for children’s hospital networks. To date, Children’s has raised over $5 billion in funding for their efforts to support children’s healthcare services for kids – Truly Amazing results for an amazing cause.
As the non-profit organization grew, so too did the need to find innovative and creative ways to continue to build and expand the systems to allow for additional growth and sustainability within the organization. A team was formed of professionals within the organization to come up with new ideas and to find ways to help grow the mission of CMN. In 2014, this team began to investigate franchising as a way to expand the distribution channels and reach of Children’s fundraising into new markets.
In 2015, Children’s Miracle Networks chose to work with Franchise Marketing Systems to conduct a feasibility study for franchising and what the model could potentially do for the mature brand as a growth vehicle. Franchise Marketing Systems worked with Children’s Miracle Network to conduct market research, build a franchise business plan, organize the training manuals, franchise marketing collateral and overall franchise strategy. Mr. Conner and his team had worked in the non-profit space within the franchise market prior and could leverage experience with related brands for this development process.
The new model started with at the unit level with prototype development for what would be franchised and what would be duplicated into new markets. After review, testing and analysis, the decided vehicle would be what was described as The Canister Program. The Canister model was very simple, it consisted of a territory based franchise model where the franchisee would work from home, use approved containers, a defined marketing model and carefully designed processes to be the local CMN franchisee who would service and area. The Franchisee would operate under the brand and leverage the credibility, brand recognition and backing of the organization to get canisters into retailers in their market and then help support the contribution to those canisters by the retailer’s customers.
The franchise model was powerful in that it would be a low investment business model, generally a simple operating concept and would not require anyone with significant sales abilities. The Franchisees needed to be good communicators, have passion for the Children’s mission and want to support the overall success of the program in their market. The franchise strategic plan supported a winning relationship for everyone involved with over 50% of the collections going directly to the Children’s non-profit foundation and the balance being split between the franchise management entity and the franchisee who was delivering these services in the market. Because franchisees’ had ownership and had made an investment into the business, they were generally more committed and focused on improving and increasing the business in their market.
The legal issues inherent in this business development model were significant and required counsel from several different firms to accurately plan for the launch. This was driven mainly by the need to be compliant with non-profit guidelines which vary per state in addition to franchise legal compliance. Only certain states would be included in the development of the Children’s Miracle Network franchise model to comply with these non-profit guidelines. Franchisees would need to be carefully scrutinized and have deep background checks in order to qualify as a franchisee for the business model.
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