The power of franchising

There is a lot to celebrate come Thursday the 26th October when the Franchise Association of South Africa holds its Franchise Conference. For the first time in four years, we will have a clear analysis of how the sector performed in terms of GDP, business establishment, creation of employment and the identification of key franchise practices. Armed with these valuable insights, the Conference, which is sponsored by the W&RSETA and Absa, will be a forum to debate the outcomes, and, as the Minister of the Departmernt of Small Business Development, Stella Ndabeni-Abrahams will be a key-note speaker, we will be able to engage with her and other stakeholders on what government should be doing for the small business sector.

The Strength of the Franchise System

“Load shedding has been financially devastating and brands are having to deal more and more with distressed units in their business model and having to work harder to maintain viable businesses and keep them open across their network.”
Comment from a Retail Franchisor

That quote comes from one of the participants that took part in the Franchisor survey which will be discussed at length at the FASA Conference. Margaret Constantaras of Research EQ, who conducted the survey had this to say about the interviews they conducted. “The statistical outcomes of the survey, which delved deep into how the franchise sector handled the curveballs of the past four years, are a reflection of the dedication and resilience of every single person that uses the ‘franchise formula’ to run their business and to show just how passionate and positive some of the franchisors interviewed were about how they tackled the challenges they faced.”

James Noble, Head: Wholesale, Retail & Franchise Business at Absa, the sponsors of the survey, agrees that the example that franchising has set on how to tackle the curveballs of the past four years is being reflected in the survey results. ‘As a bank with a dedicated franchise division, we have become part of the solution that franchisors and franchisees collectively identify – whether it’s in giving them stop-gap financing, advice on energy solutions or helping them cope with financial challenges.”

The Power of the Collective

‘The key to getting through this is to do a lot of education with all franchisees – keeping them updated, compliant and delivering high standards.”
Comment from a Business-to-Business Franchisor

This comment from a franchisor in the Business-to-Business sector echoes the commitment of franchisors to support their franchisees. Thanks to its business structure of duplication which demands collaboration, the power of the collective kicked in during these difficult past four years as the Franchise Survey clearly shows. Put yourself in the position of an independent retailer or fast food outlet trying to make a living today. You are faced with load-shedding, economic instability and consumers who are holding back on spending as they face an uncertain future. How do you survive all this and what should you be doing to get customers back or find new ones?

If you are franchisee belonging to a strong brand, you will be part of the collective family that has analysed the challenges, spoken to suppliers to try and cut costs, got the best deal for alternate energy and has put in place marketing and social media initiatives to help you through this tough period. That is the strength of the franchise sector and, as an association we must be at the forefront of fighting for the survival of the sector – with government and with stakeholders for the benefit of existing franchisors, future entrepreneurs, the thousands of franchisees out there and the nation as a whole.

Fred Makgato, CEO of FASA believes every single member of FASA and even those that are not members should attend the FASA Franchise Conference. “At this crucial crossroad in our country, we need to stand together as a sector and also join other business entities to pull us out of this deep chasm we find ourselves in. The franchise survey serves to analyse the health of the sector, its challenges and its strengths and at the conference on the 26th October, we will be asking some very important questions such as…
What are the strengths of franchising… what should government be doing … and where do we go from here?”