The 9th to 11th of this month saw the 2013 International Franchise Expo (IFE) take place in the Sandton Convention Centre, Johannesburg. Over 17 years, the relatively long-running IFE has developed into the largest and most established franchise expo on the African continent, encouraging franchisors and franchisees to embrace entrepreneurship and small business development. This made it the perfect platform recently for representatives of banks and franchising associations – in this particular case, the Absa Group Limited and the Franchise Association of South Africa – to praise the socks off the economic role of the franchising industry and claim that its ability to create employment opportunities could help answer the problem of South Africa’s high and rising unemployment level.
Happily, what they are saying appears to be true. While Africa as a whole is behind other continents in franchise developments, within South Africa itself franchising currently employs over half a million people and crosses 17 different business sectors. Franchising is an easy way to tap into the consumer markets that are growing rapidly as the African continent urbanises.
Absa
As a member of the Barclays Group, Absa has a good insight into both global and local markets. Speaking at the IFE, Absa’s Head of Franchising Africa, Banie Claasen, said that Absa’s business banking division has recognised that there is a growing demand within the franchising industry – and it has enlarged its franchise unit accordingly. “The bank is striving to support franchising businesses to flourish,” Claasen said. “With the African continent becoming the new economic frontier for development, Absa has also geared itself to assist those businesses seeking to expand further onto the continent by having dedicated industry specialists.” Absa wishes to be the first bank that potential franchisees go to when considering franchising and looking for a decent source of advice and support.
The FASA
The representative body the Franchise Association of South Africa was established in the 1970s and is a full member of the World Franchise Council. At the IFE and the parallel inaugural meeting of the Pan African Franchise Federation, Derek Smith, the new chairman of the FASA, said that the government’s attitude towards franchising has shifted as it recognises that the industry is one area that can quickly and efficiently provide sustainable jobs. Consequently initiatives such as the Jobs Fund, supported by developed banks, have been created. “This new approach will without a question change the face of franchising and give a much-needed boost to small business development,” said Smith.
(Source: www.absa.co.za.)
Burger King
Burger King, the huge US fast food franchise with outlets in 86 countries, and who came fifth inFranchise Direct's Top 100 Global Franchises Report 2013, seems to agree with all these positive statements. The evidence? On the 9th May, as the IFE began, it opened its first South African branch. It’s located in Heerengracht Square, Cape Town by the way, in case you feel like trying a Double Whopper.
Burger King’s website boasts of its “aggressive growth plans” in this country, that are “expected to contribute significantly to the South African economy and create a significant number of jobs for South Africans over the next five years and beyond.” The franchise has been rapidly expanding into high-growth, emerging markets, opening in Russia and China last year and in Brazil in 2011. Cape Town's Mayor, Patricia de Lille, said that the branch would bring a welcome boost to the city's economy.
Through speeches, banking franchise unit expansions and restaurant openings, these three large organisations have planted seeds for franchising in South Africa to grow.