Franchising Focused on Sustainability
🕒: Two minutes
Despite ten years of challenging conditions, including economic and political setbacks, the franchise sector in South Africa has continued to grow. With the appointment of Cyril Ramaphosa as President, a man with previous franchise experience himself, powerful feelings of renewed optimism are filtering down into society. The Franchise Association of South Africa's annual convention and franchise expo, held in June, demonstrated the resilience of the sector. Franchising contributes 13.3% to the country's gross domestic product through its 845 franchise systems and over 40,000 franchise outlets give direct employment to almost 400,000 people.
Following a call from the President to nurture entrepreneurship, encourage small business development, promote skills growth and add much needed jobs to the economy, FASA's annual Franchise Convention saw over 50 speakers give their take on how to achieve these objectives. Experts and industry leaders gave delegates invaluable information and advice regarding everything from finance and funding, growth and expansion, legal issues to marketing queries. Franchisors shared their secrets to success and, more importantly, how they've succeeded in tweaking their franchise model to fit into the continually changing economic landscape. From franchise operations to franchise relationships, the overall consensus was that benchmarking is crucial to staying the course and keeping ahead of changing trends is the key to long-term sustainability.
The International Franchise and Entrepreneurial Expo, also held in June, featured a diverse range of concepts from different business sectors. The franchise sector has continued its growth trajectory despite economic challenges, adding around 88 new franchise systems and 2,789 new outlets in 2017 – proving that franchising remains one of the soundest business formats, structured to withstand economic instability. According to Vera Valasis, Executive Director of FASA, "the continued growth of new franchise concepts proves that franchising is the entrepreneurial heart of any economy – its growth might be temporarily curbed due to economic influences, but it remains the one business sector that is always innovating and has the highest success rate."
Vera Valasis believes that on a global front, our changing world is opening up opportunities on the franchise horizon and on the back of a number of global brands entering the South African market, the participation of international brands at the Expo and a few others who were testing the African waters, bodes well for franchising's future in South Africa and in Africa as a whole.
"As spending patterns change, entrepreneurs will be looking at business sectors where there is an appetite for franchising and flourishing new industries will start to see the light. Niche markets are also offering one-of-a-kind franchises that give one the opportunity to get in on the ground floor of a new franchise trend."