The over 150 delegates who attended FASA’s annual convention sponsored by Absa were treated to concurrent sessions where 42 industry representatives and top speakers covered six broad areas of business – Franchise Operations, Franchise Relationships, Finance & Funding, Growth & International Expansion, Marketing & Technology & Legal. We picked up some key insights and words of wisdom from some of the speakers.
Moving with the Times
Against the backdrop of a tough trading environment with consumer confidence at an all time low, Greg Solomon, CEO of McDonald’s SA asked his audience the following question: “Are you going to be the dinosaur that misses the window of opportunity? McDonald’s, probably one of the longest surviving franchise brands of all time, whilst keeping the same consistent company culture, adheres to the power of 10 theory – what delivered results 10 years ago is very different from today. According to Greg Solomon, “To evolve you consistently need drastic change to duplicate and have to continually ask yourself; ‘who are your customers of yesterday, today and more importantly tomorrow?’
Why Franchises Fail
On the million dollar question of why franchises fail, franchise stalwart Frans Van der Colff, whilst admitting that no concept is beyond failure, believes that the three areas of franchisor failure lie in Concept, Capital and Management. A franchisor has to have the skill set to properly support a franchisee – without that support; the chance for success is reduced. When it comes to franchisee failure, Van der Colff believes that many franchisees have an unrealistic expectation of the complexity of the business, don’t follow the franchisor’s tested ‘road map’ and are often too quick to implement own ‘untested’ strategy. And the bottom line for success – franchisees need to be present!
Driving Profitability through Benchmarking
Cash Converters, the Australian franchise chain with more than 750 stores in 20 countries leads the field not only in the buying and selling of pre-owned goods, but provides its franchisees with an internationally proven, recession-resilient business model and state-of-the art benchmarking for reaching achievable goals. The introduction of robust processes and systems allows the franchisor to evaluate the standard against other franchise operations in the group. According to Richard Mukheibir, information is power. “We measure everything important, every ‘key performance area (KPA) in the business, making sure the management accounts measure the results in financial terms of the activity of the business, ensuring that they are standard across the brand, timeous and accurate.”