Farewell to 2023!

As we wind down the year 2023, we look back at, on the one hand, a tumultuous year of all-time high load-shedding and economic uncertainty – and on the other hand a year where FASA and franchising, through the results of their survey, have shown the strength of their business tenacity to be able to overcome even the most daunting of challenges.

Being able to assess the contribution by the franchise sector to the South African economy in terms of GDP, business establishment, creation of employment and the identification of key franchise practices, is a valuable tool for the sector to measure its performance, acknowledge its strengths and plans for the future.

With an estimated turnover generated for 2023 of R999 billion, a 36% increase over the figure of R734 billion which is equivalent to 15, 0% of the total South African GDP of R6 660 billion in 2023, franchisors and franchisees can be proud of their tenacity and commitment to running profitable and ethical businesses and more so to be contributing to skills transfer and employment.

Despite the upheavals of the past four years, franchisors and franchisees were keen to be part of the research analysis that would give them perspective of the past and strategies for mitigation for the future. “We would like to thank all those businesses that participated in the survey.” says Maria D’Amico, FASA’s Chair. “We appreciate the eagerness and transparency of franchisors that opened up about their challenges but ultimately, as the survey results show, it has proved unequivocally that the franchise sector, through its business system of duplication and support, has all the makings to withstand even the most trying of times.”

What the survey once again established without doubt is that franchising offers proven models, brand recognition and lower risk investments. Franchisors that strengthened their business systems and supply chains during the pandemic go into the New Year geared to build on those strengths, elaborating on steps taken to mitigate the risks, are able to introduce new strategies and embark on structured growth.

James Noble, Head: Wholesale, Retail & Franchise at Absa, sponsor of the FASA Franchise Survey, believes that franchisors and service providers need to form meaningful partnerships to achieve greater growth objectives. “Our sponsorship of the survey has given us a deeper understanding of the environment in which franchises operate and, as a bank with a dedicated franchise team, we are in a better position to respond to their needs and offer best-of-breed solutions, allowing them to focus on running and growing their businesses.”

As a business sector that has shown its resilience and determination in the face of unparalleled challenges, FASA, on the back of such a strong survey of the franchise sector, will be challenging government to do its part in safeguarding its businesses that keep the economy going. “Confronting the challenges is a two-way street,” say FASA’s CEO, Fred Makgato. “The franchise sector has, for the past 45 years, under the guidance of FASA, contributed steadfastly to the South African economy through its entrepreneurial endeavours that has seen tens of thousands of small businesses flourish, offer skills training and jobs. It is now time for government to step up and rectify the debilitating state of the country for the sake of the economy, its citizens and the future of South Africa.”