Franchising in the Lebanese Higher Education System: The Need for Regulation

Bassem Kaissi, PhD

The social demand for higher education in Lebanon has been growing over the past twenty five years. The higher education system is expanding with student enrolment increasing from 115,000 in 1995 to 205,000 in 2018. This expansion was actually one of the reasons which led to tremendous growth in the private provision of higher education in Lebanon over the same period. During the 1996-2000 period only, 23 institutions were licensed and established to accommodate for the growing demand for higher education in Lebanon. Currently, the Lebanese higher education system has 51 licensed higher education institutions (four of these haven’t started operation yet) with the oldest being the American University of Beirut established in 1866, and only one public institution, the Lebanese University.

Despite many achievements and improvements in the Lebanese higher education system in the last five years, including a new higher education law (passed in 2014), enhanced internationalization activities, improved institutional quality assurance and accreditation cultures, and boost in the regional and international ranking of most Lebanese universities (established before 1996), a scandal hit the system in July 2018 leading the Lebanese Army Intelligence service to uncover forged university degrees that were sold to army soldiers. This was followed by detaining senior administrative staff from two private universities including a president.

One of the reasons which led to this scandal was attributed to higher education franchise agreements with local providers. These franchising agreements in the Lebanese higher education system are led by four relatively new (established after 1996) private universities, including the two listed above in the scandal.

Franchising is basically a specialized form of licensing in which the franchiser not only sells intangible property (normally a trademark) to the franchisee but also insists that the franchisee agree to abide by strict rules as to how it does business. Franchising is a very old business practice dating back to the early 1800s and its extension to higher education is a more recent phenomenon that started to spread in the early 1990s especially in the UK. Although there is abundance in the literature on franchising in a business context, there is relatively much less on franchising in a higher education context.   

Despite its advantages of contributing to economic growth, widening access to higher education, creating employment opportunities, and diversifying the sources of income, franchising in higher education is by no means uncomplicated. There are usually associated problems of low quality, excessive profit-orientation, and inadequate academic supervision just to name a few.

The message from this article is twofold. First, the franchiser and franchisee should make sure that they have aligned higher education strategies with a similar focus, a commitment to joint quality academic provision, a focus on student experience, and mutual respect and trust to engage in similar partnerships that should be based on at least a comprehensive and detailed franchise agreement, a feasibility study, a risk assessment report, and due diligence checks.

Second, the new Lebanese Higher Education Council (appointed in August 2018) should draft a set of guidelines and indicators to regulate these franchises in the Lebanese context around the following recommendations:

1. The fundamental principle underpinning all higher education franchise arrangements is that the franchiser has ultimate responsibility for academic standards and the quality of learning opportunities.
2. The proposed higher education franchise should have an approval from the Lebanese Higher Education Council or at least a no-objection after checking the suitability of both parties (franchiser and franchisee) and the agreement signed between them.
3. Governance arrangements at appropriate levels are in place in both the franchiser and franchisee.
4. The franchisee should have a clear understanding of both the Lebanese Ministry of Education & Higher Education and the franchisor's expectations regarding quality assurance and the maintenance of high academic standards.
5. Although the financial agreement between the franchisor and franchisee is confidential, there should be adequate safeguards against financial conflicts of interest that might compromise academic standards or the quality of the franchise provision.
6. Entry requirements and academic prerequisites should be the same between both franchisor and franchisee. The franchiser continuously monitors the delivery of the programs and courses by the franchisee and keeps detailed records of study in relation to student achievement.
7. The franchisee should be supported by the franchiser with a staff development program covering at least university management systems necessary to support the franchise.
8. In addition to the regular monitoring and review conducted by the Lebanese Ministry of Education & Higher Education on the franchiser as part of its regular activities, the franchisee should be subject to annual rigorous and comprehensive audit.

Franchising as a main trend of modernization and innovation in higher education is expected to grow worldwide; however, it is not a hassle-free strategy.  The above proposed regulatory framework is merely a starting point for enhancing franchising quality assurance policy and practice in Lebanon. In fact, it emphasizes a generic approach that has relevance to all higher education institutions regardless of the level of development and size. The recommendations promote a regulated approach which is helpful in identifying improvement opportunities and in improving transparency and accountability of higher education institutions interested in franchising practices in Lebanon. Accordingly, they should be regarded as an agreed point of reference for continuous enhancement and for aspiring towards international best practices in higher education franchising.