Enterprise Support Scheme: Franchise Business – Ethiopia

Project Owner / Commissioner:

Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH Private Sector

Development Ethiopia (PSD-E) Program

On behalf of the German Federal Ministry for Economic Cooperation & Development (BMZ)

Implementing Partner:

Sequa gGmbH

  Application Deadline: March 15, 2026    

  1. Background                                                                                                                       

Within the framework of the Private Sector Development Ethiopia (PSD-E) Program, GIZ, in cooperation with sequa gGmbH, is implementing the Enterprise Support Scheme: Franchise Business.

The initiative aims to strengthen enterprise growth, job creation, & regional economic development by piloting franchising as a structured & scalable business expansion model under Ethiopian market conditions.

While many Ethiopian enterprises have achieved market traction & operational stability, expansion beyond single locations often remains constrained due to limited systemization, inconsistent operations, & challenges in managing growth. Franchis- ing offers a market-based solution to these constraints by enabling enterprises to replicate proven business models through standardized systems, clear governance structures, & private investment by franchisees.

The scheme focuses on a limited number of enterprises to ensure depth, quality, & effectiveness of technical assistance, while generating practical learning for future scaling of franchising in Ethiopia.

  2. Objective of the Scheme                                                                                               

The objective of the Enterprise Support Scheme: Franchise Business is to support selected Ethiopian enterprises to develop, test, & pilot franchise systems as a sustainable business growth strategy.

Specifically, the scheme aims to:

• Identify enterprises with realistic franchising potential;
• Strengthen enterprise readiness for franchising through targeted technical assistance;
• Pilot franchise models under real market conditions; &
• Generate evidence & lessons learned for potential future replication.

  3. Nature of Support                                                                                                           

The scheme provides technical assistance only. No grants, subsidies, or direct finan-

cial support will be provided.

Technical assistance include:

• Franchise readiness diagnostics;
• Development of franchise systems & standard operating procedures (SOPs);
• Legal and regulatory guidance related to franchising;
• Training on franchise management & governance; &
• Coaching during pilot franchise implementation.

  4. Target Group                                                                                                                    

The scheme targets privately owned Ethiopian enterprises with demonstrated market traction & operational stability, & a clear ambition to scale through structured replication.

While enterprises of different sizes may apply, the intervention is particularly suited to medium & larger enterprises with sufficient organizational maturity to engage in franchise system development. Smaller enterprises are not excluded, provided they can credibly demonstrate readiness and commitment.

The following entities are excluded:

• International companies or foreign brands;
• Cooperatives; &
• State-owned enterprises.

  5. Priority Sectors                                                                                                                

The scheme prioritizes enterprises operating in sectors identified as having strong potential for franchise-based expansion under Ethiopian market conditions. The focus is on consumer-facing & service-oriented business models that lend them- selves to standardized operations, quality assurance, & structured replication across multiple locations.

Priority sectors include:

• Food & Beverage;
• Consumer Goods and Services;
• Health-related Services; &
• Light Manufacturing and Processing, particularly where production is linked to structured distribution or service delivery models.

Within these sectors, enterprises that integrate digital solutions, environmentally sustainable practices, outsourcing or business process services (BPO), & agro-pro- cessing activities are particularly encouraged, especially where such elements enhance operational efficiency, transparency, resilience, & scalability. This sectoral focus supports innovation & cross sectoral approaches while maintain- ing alignment with the project’s objective of piloting commercially viable & scalable franchise systems

6. Eligibility Criteria                                                                                                              

Applicants must meet all mandatory eligibility criteria outlined below. Where these criteria are met, additional value-adding characteristics will be considered as part of the overall assessment.

1. Legal Status and Operational History (Mandatory) – Applicants must:
2. Be a legally registered & privately owned business entity in Ethiopia (sole propri- etorship, partnership, or company); &
3. Have a minimum of two (2) years of continuous operational history.
4. Management Commitment (Mandatory) – Applicants must demonstrate:
5. Active involvement of the owner or senior management in day-to-day business operations; &
6. Full willingness & commitment to develop & pilot a franchising business model within the project timeframe.
7. Compliance & Integrity (Mandatory) : Applicants must:
8. Be willing to share basic operational & financial information required for monitor-

ing and evaluation purposes; &

• Have no record of serious regulatory violations, fraud, or business misconduct.
• Additional / Value-Adding Criteria- Where mandatory eligibility criteria are met, additional consideration may be given to enterprises that:
• Are youth-led (18–35 years) & /or women-led or women-owned;
• Demonstrate a clear vision or realistic potential to expand into regional cities, including Bahir Dar, Mekele, Hawassa, Adama & Dire Dawa;
• Have at least two 2 years of experience in relevant sectors such as consumer-fac- ing services, food & beverage, health related services, or light manufacturing;
• Demonstrate sound financial management or bookkeeping practices;
• Have access to a suitable business location or a clear plan to secure one; &
• Provide products or services with broader social or community benefits, including

employment generation or local value-chain development.

  7. Selection Process:                                                                                                           

The selection process is implemented as a phased & competitive process, designed to progressively assess eligibility, commitment, & readiness for franchising, while allowing enterprises to make informed decisions about their participation.

Stage 1 – Expression of Interest (EOI)

Interested enterprises are invited to submit a completed Expression of Interest (EOI) form. The EOI is used to assess basic eligibility, management commitment, & prelim- inary suitability for franchise-based expansion.

Submission of an EOI does not constitute selection for further support.

Stage 2 – Desk-Based Assessment and Physical Verification

Enterprises shortlisted from the EOI stage will undergo further assessment, includ- ing:

• Desk based review of submitted information; &
• Physical on ground verification visits.

The purpose of this stage is to validate operational maturity, management commit- ment, system readiness, & overall franchise potential under real business condi- tions.

Stage 3 – Inception Workshop

Ten shortlisted enterprises will be invited to participate in an inception workshop, planned for April 2026.The workshop aims to:

• Introduce core franchising concepts & legal considerations;
• Inspire & inform enterprises about franchising as a growth model; &
• Support informed decision-making regarding participation in the pilot phase.

Participation in the inception workshop does not constitute selection for pilot support.

Stage 4 – Selection of Pilot Franchisors

Following the inception workshop, participating enterprises will be invited to confirm their interest in proceeding with franchising. Based primarily on demon- strated interest, management commitment, & readiness to proceed, five (5) pilot franchisors will be selected.

Where more than five enterprises express strong interest & readiness, final selection

will be agreed in consultation with GIZ.

Selected pilot franchisors will enter into a formal Memorandum of Understanding outlining mutual commitments for the pilot phase.   8. How to Apply

Interested enterprises are invited to submit their Expression of Interest (EOI) through the online application form available under the SME Support Scheme – Franchisor Application Form no later than March 15, 2026. Applicants may also scan the QR code below to access the application form directly.