Some use the term to describe the practice of nonprofit organizations opening up and running a franchise of a commercial entity. Examples include nonprofits that run Ben and Jerry's outlets through the PartnerShop Program.
Others are using the term to describe the creation of small franchise enterprises that themselves have a social purpose. Examples include LivingGoods, which I've previously discussed here. More information is on a new blog called Microfranchising, which features stories on eyeglass franchises focused on the poor and the hippo water roller franchise.
My prediction? By January 2008 microfranchising will be a big part of the discussions among philanthropists and social entrepreneurs. Just remember, you heard it here.