The worker cooperative franchise provides a model to go to scale
by Julian McKinley
More than 450 worker cooperatives exist as part of today’s U.S. economy. Collectively, they generate more than $500 million in gross annual revenue. Yet, despite a record of recent growth in numbers, a single question dominates conversations in the cooperative development field: How do we accelerate growth? The question of “more” dominates convenings of field experts and supporters alike: how do we scale so that we support models that allow for more worker-owners; more co-ops serving more communities in need, all enjoying greater levels of success than before? In response to this question, co-op developers in New York City are “building the road while walking it,” says Phyllis Robinson.
Robinson is the Coopportunity Coordinator at Center for Family Life (CFL), a Brooklyn-based nonprofit with more than a decade of cooperative development experience. This past year CFL, through its nonprofit subsidiary Coopportunity, launched a cleaning franchise called Brightly®.
Brightly® offers a distinct vision and a tangible structure for growth.
The Brightly® franchise isn’t the first family of worker cooperatives to utilize a single brand. In fact, CFL spent years researching strategies used by the Arizmendi Association of Cooperatives and Mondragon federation to help worker co-ops sprout and thrive under the banner of a strong brand name. But the nascent enterprise is the first legal worker cooperative franchise in the United States. And its launch—in addition to showcasing a unique combination of turnkey solutions and platform technology—is significant because its success mirrors a larger shift in the field.
Gone are the days when the cooperative model was predominantly used by idealists seeking an escape from capitalism’s ills. Instead, research shows the majority of worker cooperatives are being started by women, people of color, and recent immigrants. These entrepreneurs are using the model to overcome discrimination and gain access to the fruits of an economy they’ve been excluded from. In this vein, Brightly® offers a distinct vision and a tangible structure for growth. It’s still early in Brightly’s lifespan, but lessons are emerging.
A Turnkey Approach
The goals of Brightly’s founding are straightforward: upend obstacles to entrepreneurship for workers facing exploitative working conditions and accelerate market access and co-op development. If successful, the franchise could cement tangible benefits and dignity for vulnerable workers in an economy marked by declining wages, widening wealth gaps, a climbing cost of living, and the rise of contingent work. In Brightly®, worker-owners find a conveniently packaged solution designed to deliver successes most small businesses need years of hard work to build.
In Brightly®, worker-owners find a conveniently packaged solution designed to deliver successes most small businesses need years of hard work to build.
The package starts with CFL’s cooperative development team, which collectively has over a decade of experience incubating and supporting immigrant-led domestic worker cooperatives. On top of this important resource, the franchise model adds the established Brightly® brand and logo, marketing services, hard-skills training, and a confidential Operations Manual containing the “secret sauce” for running a successful Brightly® cooperative. Most importantly, perhaps, CFL’s franchise model eliminates the franchise entry fee for worker-owners, which would typically be a significant barrier for most domestic workers.
In its design of the Brightly model, CFL also addressed one of the major barriers to start-up businesses—finding customers. The clientele conundrum was solved immediately and by design, by launching Brightly® after the Up & Go cooperative, a web-based platform app that connects clients needing cleaning services to worker-owners of the cleaning cooperatives that together own the app. Up & Go and the Brightly® franchise form a symbiotic relationship, fortifying the foundations of business success for the Brightlys.
With a clear view of Brightly’s launch and early success, here are five immediate takeaways for the field to consider:
- A blueprint for replication
Paired with its Operations Manual, a guidebook to business success, and a brand gaining steam through word of mouth and digital platform support, the revised Franchise Disclosure Document and Franchise Agreement help round out a set of tools that CFL hopes will support replication — helping to more quickly scale up worker cooperatives. As of January 2020, CFL has three Brightly® cooperatives in operation, and a fourth ready to sign on.
In an industry traditionally rife with exploitation, Brightly® is doing more than creating a blueprint; it’s creating a blueprint for scaling a workplace experience infused with dignity and professionalism. This could change the industry.
- Improved domestic work experience
Thanks to worker-ownership, Brightly® worker-owners are immediately making more than they did outside of the cooperative doing the same work. Worker-owners report to CFL that their take-home pay previously averaged $11.50 per hour, while worker ownership in the Brightly® model has enabled workers-owners to make up to $25 per hour.
According to Robinson, the franchise’s democratic decision-making process enables collective establishment of rates for labor and how much they will take home.
“This is a way to professionalize the members’ work; offer opportunities to be entrepreneurs, leaders, and decisionmakers; and make more money,” says Robinson, reflecting on the immediate impacts Brightly’s worker-owners have reported. “What we’re hearing from them — and most of them are women — is that family dynamics are changing and that their kids are seeing them in a new way, [and] that they’re seeing themselves in a new light.”
- Importance of technology
The Up & Go web-based booking platform has helped Brightly® worker-owners get clients two and three times faster than other newly created cleaning co-ops, Robinson reports. Instead of having to build name recognition from the ground up, Up & Go supports Brightly® franchises by connecting them to an established client base and conducting more marketing activity than the franchises would be able to execute on their own. This relationship has been crucial to early success for Brightly®, as attracting clients is often the most difficult hurdle for a start-up business.
The Up & Go web-based booking platform — jointly owned by the Brightly cooperatives — has helped Brightly® worker-owners get clients two and three times faster than other newly created cleaning co-ops.
- Application of a legal structure to a democratic business model
Applying legal business structures and terms to democratic ownership is not easy. CFL and Brightly’s worker-owners have learned this firsthand. The initial experience negotiating the Franchise Agreement proved difficult (see “A Closer Look at Structure and Implementation” below) yet rewarding for worker-owners, but the resulting document now feels fair to both the franchise (which means future worker-owners) and current coop members. Developers in other states may want to look closely at CFL’s experience when considering the franchise model.
- Balancing cooperative autonomous entities within a franchise system
Self-governance and self-determination are fundamental elements of the worker cooperative model. CFL developers respect these principles by incorporating practices aimed at strengthening members’ decision-making skills during the incubation process and beyond. Each of the three existing Brightly® cooperatives has created its own governance processes and enjoys its own “organizational culture” and way of carrying out its work.
Coopportunity, however, as the owner of the franchise, has created a set of tools and systems, based on CFL’s years of experience and knowledge of best practices, to guide and support the Brightlys. The tools prevent unnecessary duplication of efforts and/or inefficiencies, while allowing members to focus on what is important. At the same time, Coopportunity is also able to hold the long-term vision of growth and scale to provide more opportunities to more domestic workers and immigrant communities across the country.
Each of the three existing Brightly® cooperatives has created its own governance processes and enjoys its own “organizational culture” and way of carrying out its work.
This balance of cooperative autonomy, together with the guidance, tools, and services provided by a non-profit franchise structure, ultimately offers a win-win approach to all involved: today and in the future.
A Closer Look at Structure and Implementation
The Center for Family Life created the non-profit Coopportunity to expand opportunities for domestic workers throughout the United States through the franchise model. The model relies on partnering CFL’s experienced team of cooperative developers with community-based organizations that have deep roots and relationships with neighborhood residents. There is no cost to members to join or start their own Brightly® cleaning co-op: for the moment, CFL pays those costs using philanthropic funds. After six months of operations, the co-ops contribute 5 percent of revenue to Coopportunity. Eventually, these royalty fees will help offset the costs of back office and other shared services, marketing materials, and continued learning of industry best practices. That is, eventually the franchise model will pay for itself.
As a business model, franchises and worker cooperatives don’t tend to be strategies talked about in the same circles. A franchise is generally seen as a top-down business model that generates wealth for its owner while worker cooperatives are a strategy for spreading both profits and decision making in a more even, less hierarchical manner. CFL’s approach attempts to take a successful tool of the conventional business world and make it work for workers.
“But, because we are trying to stand this model on its head to accomplish something it wasn’t designed to do, initially it was very cumbersome,” says Robinson. “A lot of tweaking and adapting had to be done.”
The original franchise document the lawyers who advised CFL developed drew primarily from existing franchise documents, meaning they weren’t written or designed to benefit workers. Brightly® members gained their first exercise in worker control as they ensured all clauses in the 200-odd pages would not only protect the franchise but would also protect themselves and future worker-owners.
“It ended up being a very empowering process for the members,” recalls Robinson. “The member-owners, aided by a team of pro-bono lawyers representing each Brightly® coop, asked lots of questions and began pushing back, saying, ‘If we’re going to sign, then we don’t think this clause is fair to us.’ We’ve taken a document that was meant for owners but had never taken into account the needs of owners who would also be the workers. Now I feel like we’ve [created] a franchise document that really does meet the needs of coop members: it protects the franchise and is fair to the workers as well.”
As CFL continues to bring the Brightly® franchise to more communities, the worker cooperative field and its supporters can benefit from watching the trail being blazed, keeping in mind how conventional business tools and forms can be updated to benefit workers.
Julian McKinley is a senior communications director at Democracy at Work Institute (DAWI). Headquartered in Oakland, CA, and New York City, DAWI works to expand the worker cooperative model to reach communities most directly affected by social and economic inequality, specifically people of color, recent immigrants, and low-wage workforces. Learn more about DAWI’s work and its library of worker cooperative resources at institute.coop.