Mission To dramatically improve the quality and access to healthcare for the poor in Africa.

1. Status: Approved May 2008 Since: 2007 HealthStore • Founder Scott Hillstrom is a lawyer in Minneapolis who created HealthStore after surviving a near-death car collision. He recently stepped aside but remains chairman and org evangelist. Leadership • Problem • Many of the diseases of the world’s poor are easily treatable. But partly due to a lack of knowledge and access to basic health products, each year 1 million people die of malaria1 and 2 million from diarrhea-related causes2. • New CEO Gunther Faber was the top executive in Africa for the pharma giant GlaxoSmithKline (and its pre-merger predecessor) for the past 19 years. Recruited to HealthStore in summer 2008. • Mission • To dramatically improve the quality and access to healthcare for the poor in Africa. This HealthStore clinic in rural Kenya, run by a nurse-entrepreneur, is the only source of medical care for miles. Below the CFWshops brand, nurses often name their clinics after saints. • Concept • Franchising offers a set of financial incentives, internal controls, and potential enforcement options to ensure high quality service and reliable products for customers. • Nurses who own and run HealthStore franchises (branded CFWshops and clinics) are motivated by a combination of community service and opportunity for profits that can exceed salaries at govt hospitals. • Buy medicine in bulk from legitimate sources to stem two major problems for the poor: high costs and counterfeit drugs. • Employ franchising principles of training, operating support and oversight, quality control, consistent product/service offerings, branding, and benefits of scale. • Analysis • This is one of our 4 key investments in the field of health franchising. Among the first to apply the franchise business model to improve healthcare in the developing world, HealthStore has built a network of clinics in Kenya and gained widespread attention in the media. • Faber joins at a critical juncture: HealthStore management had made operational miscues and poor personnel decisions, growing too fast and failing to adhere to franchising principles. But the model is promising. • Hillstrom is a tireless advocate of health franchising and HealthStore, but fundraising and board giving remain as challenges. He’s been more successful in obtaining subject expertise, especially the significant pro bono consulting from industry expert Michael Seid. • Average yearly sales of $2,319 per CFWshop (pharmacy) and $5,902 for CFWclinic (with nurse who sees patients). • In 2007, HealthStore provided 41k malaria treatments, 48k worm treatments, 9k diarrhea treatments, and sold 3k bednets. • Model • Market-driven approach relies on two forms of payment: out-of-pocket from individuals and reimbursement from govt insurance plan (Rwanda). Also developing a third-party payor system in which HealthStore franchisees receive payment from donors & U.S. govt aid for services rendered. • Extend credit to nurses to join franchise and buy inventory. Plan for Scale Rwanda HealthStore • Progress • 1997: Launch in Kenya. • 2000: 11 shops • 2006: 61 shops • 2008: Launch in Rwanda. • Revenue • 2002: • 2003: • 2004: • 2005: • 2006: $62k $217k $645k $1,146k $626k DWFF contact: Josh Kwan, Director of International Giving. joshkwan.dwff@gmail.com Updated: 9/08. Site visit: 8/07 in Kenya, 4/08 in Rwanda. www.healthstore.org 1World Health Organization, 2USAID