Over the past few months, we have published a series of articles designed to encourage those of you who want to go into business for themselves but not by themselves to consider investing in a franchise. We stressed that whilst there are no guarantees, operating under an established brand and with the franchisor’s full support improves a newcomer’s success chances considerably. Fair enough, but what does franchisee support consist of? After examining accepted best practice on this topic, we ask Tony da Fonseca, managing director of the OBC Group and chairman of FASA, to tell us how his organisation handles the franchisee support function. Franchisee support – what does the term mean? After looking at several local and international examples of best practice in franchisee support, we concluded that whilst business sector-specific differences do exist, a set of overarching principles applies to any and all franchises. First and foremost, a clear distinction must be made betwe...

A relatively large number of players in the franchise sector are lagging behind with the implementation of meaningful B-BBEE initiatives. This could create the impression that the sector resists transformation but this is not the case at all. We decided to examine the situation and came up with the following findings. Problem statement Transformation in the franchise sector has indeed been slow. This is an unintended consequence of the criteria for transformation set out in the B-BBEE Act. The Act lists five elements for compliance: Ownership, management control, skills development, enterprise development and socio-economic development. The weightings applied in terms of the Act placed emphasis on ownership and management control. Meeting requirements in these two areas created difficulties for franchisors and their franchisees alike. FRANCHISORS Responsible franchisors pride themselves on assuming moral responsibility for their franchisees’ success chances. This forces them ...

Tony da Fonseca Planning to start a business but not quite sure whether you should go it alone or invest in a franchise? If so, you are not alone. It is safe to assume that franchising has the highest public profile any business model has ever had. That’s why many prospective entrepreneurs see investing in a franchise as a passport to instant riches whilst a few are convinced that franchises are a con. Both groups are wrong. This article explores the pros and cons of becoming a franchisee. What does the term ‘franchise’ mean? The modern definition of franchise is “being in business for yourself but not by yourself.” For a franchise to exist, it must be based on an existing and highly successful business. Several other criteria apply and will be discussed in another article. Let’s just say at this point that a mere idea can never form the basis for a franchise. How does franchising work? The main stakeholders in a franchise relationship are the franchisor and the franchisee. ...

SA Franchise Warehouse recently reported on the OBC Group’s sterling performance in the face of strong economic headwinds. Over the past few years, OBC Group had won several coveted awards. Recently they did it again and announced two more awards. This further cements their position as a professional franchise concept that is virtually recession-proof. Tony da Fonseca at the SAPCC's 5th Anniversary Gala Dinner The South African Portuguese Chamber of Commerce recognises individuals and companies with Portuguese links that perform well within the South African business arena. At a glittering gala dinner, held at the Wanderers in Johannesburg on 28th July 2018, the OBC Group was declared winner in two categories, namely SAPCC / Standard Bank Franchisor of the Year 2018 and SAPCC Mandela Tribute Award 2018. Said Rui Marto, Executive Director of the SAPCC, “The Franchisor of the Year Award celebrates the success of a franchisor who has made a significant impact in the market...

To tackle unemployment, Government has identified the SME sector as a promising platform for job creation. Fair enough, but an unacceptably high percentage of new SMEs fail, often within the first or second year of their existence. Business failures are a toxic mix of broken dreams, lost jobs and significant financial losses but fortunately, there is a better way. Investing in a franchise gives new entrepreneurs access to a tried and tested business model and increased chances for success. Unfortunately, not all franchises are created equal, posing the question, “what makes a good franchise?” We decided to find out. What makes a successful franchise? Text books on franchising will tell you that a franchise needs to be based on a product or service that satisfies a proven need by a growing market. The founder of the business should optimise product design, operations, marketing and sales channel development, systems and procedures before considering expansion via the franchise ...