November 28, 2023


Rich Inside You

Then and now… how has franchising fared in South Africa?

5 min read

Because the Franchise Affiliation of South Africa, in affiliation with Absa, embarks on a definitive trade survey after a break of the previous 4 gruelling years – that included the debilitating results of the Covid-19 lockdown rules, flooding and the July 2021 riots and looting, political turmoil and financial pressure – it hopes to get a transparent indication of the challenges franchisors and franchisees confronted and extra importantly what lies forward for the way forward for this vital sector.

Then… the 2019 FASA Franchise Survey confirmed that while the trade was taking pressure because of the slowing financial system, franchising contributed 13.9% to the nation’s GDP (R734bn) via its 813 franchise methods and its 47 923 retailers and using, instantly and not directly, virtually 500 000 individuals. It confirmed a stable efficiency regardless of robust financial situations and was testomony to the tenacity of this distinctive enterprise format.

Now… there isn’t any query that companies throughout the board, large and small, together with franchises had been hit onerous by the snowballing impact began by Covid-19 and affected by so many different socio-political and financial components since then.

By and huge, the franchise sector has, via these attempting instances and according to world traits, relied on the energy of the collective made up of franchisors and franchisees – all tackling issues and discovering options collectively.

“FASA has, for the previous 44 years, overseen the institution and development of this very important sector” says Fred Makgato, FASA’s CEO.

“We can not permit development in our sector to regress or decelerate as the way forward for South Africa depends on a vibrant sector like ours that encourages entrepreneurship, performs a job in abilities switch and in job creation. Now, greater than ever, franchising wants to carry its personal, take the highway to restoration and proceed to play the vital function it does within the nation’s financial system.”

Due to sponsorship from Absa and the dedication of its franchise division, FASA has commissioned Analysis EQ to conduct the survey below the succesful path of Margaret Constantaras, Head: Quantitative Analysis & Governance who has a specific curiosity in franchising as she is finishing her PhD on this discipline.

“Since our involvement in FASA’s surveys of the sector since 2014, we will likely be devoting a great portion of the survey on how franchisors and franchisees coped throughout what was most likely essentially the most attempting 4 years in enterprise and determine their strengths and weaknesses.”

The surveys will give attention to:

– The Franchisor Survey will observe the franchise trajectory in South Africa over the previous 4 years, whether or not it’s upholding its contribution to GDP, assessing any losses it could have incurred through the previous turbulent years by way of drop in income, working/closure of shops, creation of employment and clarification of key franchise practices.

– The Franchisee Satisfaction Survey will measure the temperature of the franchisees on the coalface of the financial system and is important to the well being of small companies inside the financial system. This contains an evaluation of how franchisees coped within the tough buying and selling surroundings and whether or not they’re getting the required help from their franchisors.

“Each these surveys are vital, says Margaret Constantaras of Analysis EQ, “not solely inside the context of the place franchising sits in its contribution to GDP, however an evaluation of how COVID-19 and the lockdown rules – and different financial and political occasions impacted the sector. As franchising operates within the entrepreneurial house providing enterprise alternatives, it is very important franchising and FASA’s long-term development technique.”

In accordance with James Noble, Head: Wholesale, Retail & Franchise Enterprise, who has been concerned within the franchise sector and FASA for over twenty years, taking part in a component in monitoring franchising’s development by sponsoring the surveys is essential for the way forward for this very important sector.

“Franchising is within the nationwide curiosity as it’s a enterprise mannequin that makes a significant contribution in direction of fixing one among South Africa’s most urgent issues – job creation. We recognise the very important function that the franchise sector performs in creating wealth and employment alternatives in South Africa.

“By sponsoring and facilitating this important survey, we will likely be in a greater place to know the market dynamics and the surroundings by which our shoppers function, determine the challenges that franchisors and franchisees face, supply revolutionary options and ship aggressive merchandise that can meet their future wants and help their and the nation’s development targets.”

“FASA’s success on the world stage and as a long-time member of the World Franchise Council makes it all of the extra important that we preserve tabs on the expansion of the franchise system inside South Africa as it’s the most important franchise market in Africa,” says Maria D’Amico, Chair of the Franchise Affiliation.

“We hope the surveys will assist determine development areas within the many sectors of enterprise that may be franchised – from mentoring fledgling township entrepreneurs to turn into established and moral operators to encouraging giant company manufacturers to think about changing their firm shops to franchised shops as a extra economical and worthwhile choice and inspiring different operations to think about going the franchise route if their enterprise system is able to being franchised.

“However we’d like authorities to additionally play their half and decide to facilitating the enterprise surroundings, ensuring that enterprise is ready to function successfully and effectively.”

FASA’s Franchise Surveys will likely be performed from Might to July this yr with franchisors and franchisees throughout the fourteen completely different enterprise sectors taking part in one-on-one and on-line interviews.

The outcomes of the surveys will kind a part of FASA’s occasion calendar for the second half of 2023 – which features a Franchise Expo in August and the FASA Convention in October. Analysis EQ invitations all franchisors and franchisees, whether or not FASA members or not, to contact them in the event that they wish to take part within the survey.

Supply: Retail Temporary Africa –
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