Staying ahead of the game in the face of adversity

To be able to stay ahead of the game franchisors must strengthen their business systems and supply chains, restructure any areas that are dead-weight and then go out to market to highlight their strengths, elaborating on steps taken to mitigate the risks, introduce new strategies and publicise how franchisees were supported. In view of this, franchisors need to:

– Capitalise on the brand’s stability
Do not be afraid to divulge the steps taken to mitigate the challenges the brand suffered, how franchisees were supported and, by extension, how customers were serviced. A strong brand that conveys resilience, consideration and care will win the day.

– Have a strong base of existing franchisees
A strong base of existing franchisees that is well-equipped and supported to handle any future challenges, and a head office that has learnt the hard lessons from this trying time and has put in place ‘intensive care’ contingency plans. Only then can a franchisor confidently welcome new franchisees into the fold, confident in the knowledge that his/ her organisation has weathered the storm and can look to future growth and success.

– Expand with flexible franchise options
With fewer potential franchisees, a poor economy and rising expenses, franchisors have to offer more flexible investment options in the form of smaller footprint models whose operating costs such as overheads and labour could be somewhat contained.

– Diversity
This trend as a broader cultural consciousness is evolving through all business sectors as lessons were learnt that having all one’s eggs in one basket was often a risk and the fact that people finally recognise that multicultural markets are largely untapped.

– New consumer habits
Whilst price and quality remain a top priority, consumers still value the experience of their favourite brand, and this should be top of the list for every franchise business. Analyse your business model and see if there is scope to broaden your offerings to include as many options as possible to make life easier for your customers.

– Recognise market disruptors and act accordingly
The pandemic, the riots, floods, load-shedding and general political chaos have been the most negative disruptors South Africa has ever seen. Technological innovations such as the metaverse should not be seen as a passing fad but be investigated as potential ways to expand market share.

– Online retail
According to World Wide Worx online retail has hit a major milestone in South Africa, eclipsing R50 billion in annual sales during 2022, recording a 40% increase in the total number of South African shopping online since the onset of the pandemic in 2020. Online and social media presence, whether for deliveries or customer interaction, is a must if franchises are to thrive into the future.

– Technology
It may seem that the world has regressed following the pandemic and its associated value and supply chain challenges and other political and social challenges, but it must be recognised that all that upheaval spurred on new technological breakthroughs that ultimately will benefit businesses through increased efficiencies result in reducing costs and margins.

– Consolidating before expansion
Franchisors need to step back and attend to existing franchisees rather than embarking on any aggressive expansion plans. The goal should be to create a strong bond with all franchisees and work out a plan that will attend to those struggling to ultimately bring them back in line with consistent growth and profitability. By being part of the recovery and rebooting of the brand, the brand’s true potential will be unleashed.

Conclusion

Franchising represents a sustainable business option for South Africa, offering significant benefits in terms of job creation, entrepreneurial development, and economic empowerment. While challenges exist, they are not insurmountable. With the right support mechanisms, access to finance, and a conducive regulatory environment, franchising can play a pivotal role in South Africa’s economic future. As the country seeks pathways to inclusive growth and development, franchising stands out as a model that can bridge the gap between economic potential and entrepreneurial success.