Renewing its confidence  in the franchise sector Sanlam has, for the fifth year, confirmed its sponsorship of the Franchise Association of South Africa (FASA)’s 2019 Franchise Surveys.The surveys are an important barometer that track the success of this unique business system which in the latest survey shows an estimated turnover of R721 billion equivalent to 15,7% of the total country’s GDP. Its 865 franchise systems support over 45 000 outlets operated by franchisees who in turn employ 369 573 people. This contribution to the South African economy by the franchise sector has continued on an upward trajectory in spite of adverse economic conditions, socio-political factors and often challenging business regulations. The Franchise Association of South Africa (FASA), which has represented the sector for the past forty years, welcomes the forward-thinking intentions of President Cyril Ramaphosa and Finance Minister Tito Mboweni who promise a ‘new dawn’ for the country, with t...

With Minister of Finance Tito Mboweni’s mini-budget speech still resonating and giving some hope with his call that ‘together, as a country, we can rebuild and recast our future... and choose a path that takes us to faster and more inclusive economic growth and strengthens private and public sector investment,’ the Franchise Association of South Africa (FASA) signs a Memorandum of Understanding (MOU) with the Small Business Institute (SBI). According to Vera Valasis, FASA’s Executive Director  ”the collaboration with SBI will provide FASA with an official ‘voice’ to be represented and lobby through the SBI at BUSA level on business related issues that arise on a regular basis.  We hope our involvement with both the SBI and BUSA will help strengthen the voice of small business and franchising in particular to government.” The Franchise Association of South Africa (FASA) has a proud 40 year history of nurturing entrepreneurship through the franchise business system and o...

Tony da Fonseca The Franchise Association of South Africa (FASA) believes the franchise sector, which contributes 11.6 percent to the country’s GDP and employs close to 400 000 people through its 757 franchise systems and their 35 111 franchise outlets, can play a key role in creating new businesses to grow the economy through innovative venture creations. To this end, the Franchise Association runs an active Transformation, Stakeholders and Funding committee made up of franchisors, funders and government institutions represented by the Department of Small Business Development and its agency sefa to explore new ways to facilitate transformation, empower entrepreneurs and small businesses in bridging inequality whilst creating prosperity and employment.   In view of the National Development Plan’s target of 11 million jobs to be created by 2030, with 90% of those jobs expected to be created by small and expanding formats, solutions to the employment challenge need to be tackl...

At the recent World Franchise Council meeting in London, of which the Franchise Association of South Africa (FASA) is a member, the focus was on sustaining the growth of franchising worldwide in continuing turbulent times through ethical franchise principles. According to Vera Valasis, Executive Director of FASA, “at the meeting it was acknowledged that upholding ethical franchise principles through franchise association accreditation continues to be the key to the healthy growth of franchising globally. This is proving to be a challenge in South Africa as the legislative wheels grind slowly and although FASA was able to influence the inclusion of provisions for franchising in the Consumer Protection Act, there are very few checks and balances to ensure that franchisors are indeed adhering to the provisions of the Act.” The appointment of an ombud, which was gazetted in 2016, has also yet to happen. FASA remains the only body that is ensuring that its accredited members, who voluntar...

With the recent entry into the South African market of a large number of new franchises, particularly in the fast food sector – think queues around the block at the openings of Burger King and Starbucks, the arrival of Domino’s Pizza and Krispy Kreme and the proliferation of so many other franchises in just about all industry segments, it is no wonder that franchising contributes almost 12.5% to South Africa’s GDP. The potential for these franchises to contribute even more lies not only in generating increased sales of their respective products and services, but in the business to business opportunities that exist between them. “We have franchise operations in almost every industry sector,” commented John Baladakis, former Chairman of the Franchising Association of South Africa , proponent of ‘buying local’, “From FMCG, real estate, education, retail, and in automotive related activities. If each and every one of these businesses pledged to procure locally grown, produced and man...

Reacting to two announcements this week - on the proposed national minimum wage of R20 per hour or around R3 500 per month and unemployment rising 27.1 percent, the highest in 13 years – the franchise sector, which contributes 11.6 percent to the country’s GDP and employs over 400 000 people through its 757 franchise systems and their 35 111 franchise outlets, is keen to find  solutions that will maintain a balance between paying a liveable wage and creating the necessary jobs to grow the economy. This is according to Vera Valasis, FASA ’s Executive Director.  “The franchise sector is unique in that it is represented in seventeen different business sectors – many of whom have their own sector bargaining councils setting their own minimum salary scales. “Whilst we wholeheartedly support the move towards paying a liveable wage, and many of our franchise owners already pay their staff above the minimum prescribed wage, those in the more rural areas where lower sales are realise...

Although not anywhere near the frequency when load-shedding was in full force, power and especially water cuts have become more and more frequent in the past few months as the drought sets in and infrastructure problems persist.  Even small outages and water cuts can have disastrous effects on unprepared businesses and the Franchise Association of South Africa (FASA) is concerned at the impact that water shortages and cuts is having on its over 700 franchise systems and their over 35 000 franchise outlets. In Ehurhuleni, where water rationing has been implemented, there have been regular water cuts between 9 pm at night and 5am in the morning.  Whilst this on the surface seems logical, this can have an adverse impact on the restaurant and fast food industry, for example, that trades late at night.  This could result in businesses having to close earlier to complete their entire hygiene cleaning procedures before 9pm at night – a move that will lose them valuable rev...

FRANCHISING SINGLED OUT IN MINISTER OF SMALL BUSINESS, LINDIWE ZULU’S RECENT SPEECH IN THE NATIONAL ASSEMBLY Lindiwe Zulu After a year in office and in her address on the occasion of Budget Vote 31 in the National Assembly last week, Lindiwe Zulu of the Ministry of Small Business reiterated her mandate of leading and being the commanding voice for Small Business and Cooperatives within government. “Our hawkish eyes will search and grab every opportunity presenting itself in support of growth and sustainability of SMMEs and Cooperatives.” Minister Zulu singled out franchising as a catalyst for economic growth and job creation. “The department is determined to transform the franchising sector through various measures and one of them is to develop more franchisors from townships and rural communities. We have started a process of identifying and packaging successful and profitable businesses based in township and rural areas. Micro-franchising is still at its infancy stage in So...

FASA appoints its first franchisee as chairman John Baladakis For the first time in its 36-year history, the Franchise Association of South Africa (FASA) has appointed one of its franchisee members as Chairman for 2015. John Baladakis is a Pick n Pay Franchisee.  His appointment comes at a time when the country needs to grow its economic base on every front, particularly in the small business sector. FASA was established as the franchising sector in South Africa was finding its feet. Today the GDP contribution of the franchising industry is estimated at almost 10%, with an excess of 620 franchised systems operating and over 31 000 franchised businesses countrywide who, in turn employ about 323 500 people in the sector. In his address at the FASA AGM, John Baladakis said he intended to build on the work done by the association over the 36 years of its existence.  “As a franchisee that benefited from the opportunities that franchising afforded me in the field of entrep...

How to make the best of your visit to the International Franchising Exhibition   Franchising is considered one of the most successful business mechanism in the modern world. It is said that franchising increases a business’ success rate by 80% or more, as it is cemented on the learnings and triumphs of other business pioneers, making it an ideal option for the entrepreneur looking for a smart investment. The challenge lies however in the process of identifying the correct business opportunity to invest in. With so many options available, making the right choices can be a time consuming one. Fortunately, events such as the International Franchise Expo (IFE) have been put in place to provide interested entrepreneurs with as much information on the various opportunities as possible – all in one place. The issue of effective decision making does, however, still persist when visiting such exhibitions, as potential franchisees can easily be overloaded with information, which can ...

How do you benefit if your franchised real estate agent is a member of the Franchise Association of South Africa? By Jan Davel Some franchisors include ‘accreditation’ and ‘award’ symbols in their advertising material, relying on the consumers’ and prospective franchisees’ lack of knowledge with regard to the significance or importance of such symbols. Some of these commonly used symbols offer no benefit to consumers and often its relevance to the franchisor’s industry is dubious. Whether intentional or otherwise, the use of such symbols may also be misleading. It pays for prospective franchisees to be informed about the value such ‘accreditation’ and ‘award’ symbols actually afford a franchisor. In other words, don’t take everything at face value and be sure about the accreditations your future business partner actually enjoys. Take the real estate industry as an example. With the transformation of this highly lucrative, but potentially risky industry into a highly regulated ...

South Africans have become used to our energy supplier ‘crying wolf’. After the debilitating electricity blackouts back in 2008 when we all rushed out to buy generators and businesses geared themselves to operate with alternative power, Eskom has, over the past five years threatened power cuts which, by and large, didn’t happen. Now, word out there is that this time it’s for real and South Africa can expect rolling blackouts this winter. With the chaos at the Madupi Power station, maintenance woes at Koeberg and a narrowly averted strike at Exxaro in Mpumalanga, Eskom is once again appealing to the public and business to go easy on electricity usage. At a series of regular breakfast seminars held by the Franchise Association of South Africa (FASA) for members, both franchisors and franchisees have voiced their concern that this second round of rolling blackouts will have an even greater impact on their businesses than those in 2008. The general feeling was that back then businesses ...