Although franchising is one of the sectors that has shown resilience and continues to grow in this tough economic environment, it is still a business that may  provide an element of risk to franchisees and franchisors. According to Morne Cronje, Head of Franchising for FNB Business  franchise systems are based on a proven model that can be successfully replicated; these types of businesses are often considered less risky by entrepreneurs. The reality is that no franchise is immune to tough economic conditions, success factors vary depending on the concept, strength of the brand, management and the industry.  For example, fast food and restaurant franchises are currently outperforming their peers due to the viability of the businesses and increased demand.   Cronje says there are quite a few challenges that franchise owners should take into consideration during these tough times. Shrinking disposable income – as the cost of living increases due to a numbe...

Morné Cronjé The South African franchise industry has evolved to become a substantial contributor to the local economy. While current economic conditions remain fickle, the South African franchising sector remains optimistic for 2016. Morné Cronjé, Head of FNB Franchising says, “In South Africa, the franchise industry has remained solid despite challenging economic conditions and the country remains attractive to local and international franchise brands. The South African franchising sector is made up of 88% home-grown concepts and there are more than 600 franchised systems operating with over 31 000 franchised businesses and employing just over 320 000 people countrywide.” Cronjé says that as a result, it is critical that this integral part of our economy assists in achieving sustainable growth in employment, generating foreign direct investment opportunities, innovating and disrupting traditional business models and generating growth. South Africa’s economic growth has b...

The holiday season is usually a busy and potentially profitable time for the franchising industry and with the peak holiday season fast approaching, businesses should prepare themselves for the absence of staff in the forthcoming summer months. Morné Cronjé, Head of FNB Franchising says, “Adequate plans need to be put in place so that profitability is not lost and staff morale stays high. The upcoming school holidays and potentially good weather, lead many people to take their time off during the summer months. Holiday periods can be disruptive, but franchisees cannot allow themselves to miss delivery deadlines or compromise customer service because of inadequate preparation and staff scheduling. This can have a negative effect on businesses, especially during the current economic conditions we find ourselves in.” Cronjé says there are a number of steps that can be taken to make sure franchisees and franchisors are ready for the holiday season. Plan in advance  Make sur...

Innovation is an important part of owning a franchise. “One way to set yourself apart from the pack and to always stay ahead is to innovate. If you stagnate, your business will fall behind and will most probably not be a success,” says Morne Cronje, Head of FNB Franchise. There are a number of ways to innovate.  Be different The heart of innovation is to be different. So always look for ways to be different and  for ways to stay current.  Introduce new technology Something that will set your business apart from others is to incorporate technology to make you business more proficient. If you have a frozen yoghurt store, maybe you’ll have machines that work faster and better, or it could be that you’re using the latest payroll or admin technology to make your business more efficient. Marketing Marketing is an excellent space in which you could innovate. Do something different to your competitors, like incorporating social media into your marketing strategy. Soci...

While owning a franchise is a less risky approach than starting something from scratch, there’s no guarantee that it will work. “If you’re thinking about starting a franchise there are a few things you should know before you start the process,” says Morne Cronje, Head of FNB Franchise. You’re not alone You’ll be running your own business, but you have a network of franchisees and franchisors who you can go to for help and support. They are there to help and guide you, so make use of your network because that’s what they’re there for. Do it for the right reasons You’re going to be investing your time and your life into this business, so don’t do it for anyone else, but yourself. Some people go into franchising so that it’s something they can pass on to their kids, who might not even be interested in franchising. Becoming a franchise owner is not a decision to take lightly. If you don’t do your homework and have a proper business strategy, your business will not succeed.  C...

Tip Box: Characteristics of a franchisee Owning a franchise is one of the ways  one could be a business owner. Franchising comes with a tried and tested business recipe, along with having the support and backing of a franchisor. “It takes a special kind of person to be a franchisee.  A franchisee is an individual with a burning desire to succeed in a business,” says Morne Cronje, Head of FNB Franchise.  Cronje says that there are a number of characteristics of a franchisee one should  explore.  Ability to adapt As a franchisee, you need to absorb new concepts quickly. Remember that your business comes from a franchisor’s blueprint. So if your franchisor makes a decision for the business, it will affect you and you need to adapt to the necessary changes.  A positive outlook Cronje says that the future for franchising is positive, even though the economy is slowing down, but you have to go about things in the right way. Firstly, the days of buying ...

How to choose a franchise Morné Cronje You’ve taken a huge step in deciding that you want to have your own franchise, now you need to decide what type of franchise you want to invest in. “It’s a serious decision to take on a franchise, and just because you’re buying into an existing business, it doesn’t mean that it’ll be a success,” says Morné Cronje, FNB Head of franchising. There are a number of factors to consider before embarking on this journey. What are your dreams and goals Owning a franchise is a perfect opportunity to find something that matches your dreams and goals. They can explore the dreams you hope to accomplish through franchise ownership and determine your skills and preferences so that the companies you investigate match well with your passion and interests.  Do your research: is there a demand for the franchise Speak to franchisors and franchisees that were and are currently in the business. They will be best equipped to tell you what the current...

Moving your franchise into Africa How to take your franchise across borders Africa holds enormous potential for the growth for franchise operations and has succeeded in driving global franchise brands into the continent. Many brands have made aggressive plans to further grow their African operations. “There is still much scope for growth if you’re thinking about moving into Africa.  We can expect to see similar announcements from listed franchisors as well as their unlisted counterparts who are continuing to capitalise on rising consumer spending and development across our borders,” explains Morne Cronje , FNB Head of Franchise. Cronje explains that a few factors need to be considered before taking that first continental plunge. 1. Know that you may not be welcome  “There is a lot of intercontinental rivalry. As a South African you are competing with many global brands and as a result may not be the preferred supplier in the market. In many instances a US or UK ...

Leadership Lessons in Franchising  Things to start doing in 2015 Morne Cronje “Employees perform at their best when they are set up to succeed,” explains Morne Cronje, Head of FNB Franchise. Today, we find that more and more successful leaders are surrounding themselves with people who are better than themselves. Success in business means looking further than just your basic business model and strategy. Successful leaders are those who have invested in the right talent, built and developed meaningful relationships over time, lived the company culture, vision and mission. “Leaders today need to look at opportunities that were previously unseen or unheard off. It is this mindset that encourages employees to think differently, innovate and disrupt the current status quo,” explains Cronje.  Leadership lessons can be seen with the success of  Sorbet the chain of beauty salons which has seen the business grow to over 117 outlets. Ian Fuhr, CEO Sorbet explains that, “...

Franchising in 2015 How to ensure that your franchise remains successful Morne Cronje The global franchise environment is growing at a fast pace. Looking into 2015, South African franchises are confident about their growth prospects and better yet, looking at ways of improving the current business conditions.   A rejuvenated business environment is key to ensuring the survival and growth of many franchises. Currently franchise businesses, big and small face many challenges. “We are seeing slower economic growth, increased unemployment, new regulations, further load shedding and labour unrest, which increases the cost of doing business and makes it difficult to justify new investment opportunities,” explains Morne Cronje, Head of FNB Franchise.  Businesses have become more risk averse and are willing to take calculated risks to grow and develop their businesses. He adds that  companies need to be cautious in the current economic landscape given the challenges t...

Keep your franchise relevant How to keep your franchise sustainable in the market In this highly competitive environment keeping a franchise concept relevant is crucial to the success and sustainability of the business.    “ The Ocean Basket franchise has a proven and sustainable business format which gave me confidence to operate and allow me to build my business into a profitable asset. Paying an initial fee to set up using the brand, coupled with the proven business format and support from the franchisor has been invaluable.” says Juliana Overbeek, owner Ocean Basket Scottburg, KwaZulu Natal. Customers are becoming increasingly demanding from a service perspective. They work hard for their money and when they visit a restaurant they demand quality, excellent service and value for money. Overbeek explains that “International indicators show that the ‘take away’ concept is more relevant and popular than sit down restaurants. The success and functioning of the r...

Investing in a franchise Franchises in shopping malls Sorbet has revolutionized the face of beauty in South Africa and is growing at an unstoppable rate. As one of the leading beauty franchises in the country, the nail and skin brand is defined by convenience, professionalism and reasonable price points.  Opportunities for growth in the retail space in growing. According to figures from the South African Council of Shopping Centres at least 25 new shopping centres, are expected to be added to the market between 2013 and 2016. “The retail space has become a core business hub. We find that many brands have established themselves in the retail space. If not planned properly, the costs incurred could be high and detrimental to your business,” explains Morne Cronje, FNB Head of Franchising.  “I invested in the franchise from past experience. I was impressed with the concept from a customer perspective and decided to investigate the prospect of investing in a franchise of my o...

A well thought out franchise Establishing your franchise in a fast changing economy The rapid pace of urbanisation has created a greater concentration of economic activity in South Africa and has in turn affected the franchise industry holistically. “The franchise landscape has been shaken up with the proliferation of local franchises competing with the more established local and international franchise brands. From sit down to fast food restaurants, the industry has seen an increase in the number of local and new franchise concepts that have permeated the market,” says Morne Cronje, FNB Head of Franchising. Amina Bassa, owner of RJ’s on Florida Road in Durban agrees. She believes that “the restaurant franchise business is a fast paced industry. I looked for a franchise that would cater for everyone’s needs, including the halaal community. However, with its warm street vibe, and local and international visitors opening a franchise on popular Florida road was no easy feat.” ...

The franchise ‘economy’ in 2014   The South African franchise industry has evolved to become a substantial contributor to the local economy. Recent reports indicated that South African companies dominated the latest World Economic Forum (WEF) global growth companies list, with six local businesses named the most dynamic in terms of growth in the continent.  Morne Cronje, FNB Head of Franchising explains that “Africa is fast becoming a dynamic business hub. The calibre of franchise brands in South Africa penetrating the rest of the African continent is remarkable. Together we need to find innovative ways of integrating business efforts that will ensure that there is greater diversification in the business sector. This will not only contribute to the economy but also encourage business partnerships on all levels.” He adds that “we need to continually network and create dialogue in the industry. The annual FNB Franchise Leadership Summit (FLS) does just this. It provides ...