FASA’s newly elected chairman issues a challenge

Are you ready to participate in one of the biggest economic marvels of our time, the sector that contributes almost 12 percent to our country’s GDP?

Are you aware that the South African franchise sector currently offers business opportunities in no less than 17 different business sectors, providing work to approximately 500,000 people in approximately 30,000 franchised outlets? With no less than 550 franchise system to choose from, the good news gets better when we compare the status of our own franchise industry with countries such as the US, UK, Australia and Brazil, and discover that it reveals ample opportunity for expansion into many more business areas.

Personally I believe that the franchise sector can make a marked difference in driving the South African economy. Franchising has the ability to stimulate the economy on so many different levels – from conceiving those brilliant ideas that translate into new franchise concepts, to duplicating those business formats that allow entrepreneurs to invest in their own small businesses. An established franchise network contributes extensively to skills transfer and in turn provides much needed jobs. The resilience of the franchise sector during adverse economic conditions has been proven and we were delighted to note that more than 2,200 new franchised business outlets were established during two of the toughest economic years experienced since the great depression of 1933.

For those considering new business opportunities against the backdrop of the current global economic and financial turmoil, I sincerely hope that the negative press and adverse economic reports have not caused you to become despondent, but rather that you have recognised the myriad of opportunities and solutions presented by the franchise sector. Consider for example, that in its 2011 mid-year estimates, Statistics SA said that the South African population had passed the 50,5 million mark, then consider that all these people, a third of whom are younger than 15, need to live, eat, drink, sleep, dress, work, commute and consume, and that in fact you are surrounded by opportunities and consumers. The question is: “Are you positioned to take advantage of these opportunties?”

On a global front, our changing world is opening up yet more franchise opportunities. As spending patterns change and entrepreneurs look to business sectors where there is an appetite for franchising, we expect that flourishing new industries will emerge. Niche markets are offering one-of-a-kind franchises and an opportunity to get in on the ground floor of a new franchise trend.

Franchising in South Africa has been playing a crucial role in small business development, skills transfer and job creation, a trend that is set to continue as we emerge from the recession. All the while FASA, through its commitment to promoting franchising in line with government’s mandate to encourage economic development, continues to safeguard the environment for franchising to flourish.

Having proven that it can fulfil the criteria for small business expansion and job creation, franchising may well be one of the most important keys in solving some of our country’s biggest problems, including the lack of education, unemployment and poverty. While formal sector employment fell alarmingly in the two years from 2008 to 2010, the franchise sector created 2,300 new business outlets and more than 28,000 new jobs. Government and business should pay more attention to franchising and small business development, giving it a bigger role in their planning for economic growth and employment creation.

Franchising can indeed go a long way in stimulating entrepreneurship and job creation by helping people establish the successful small businesses that form the backbone of the economy. Franchising employs inexpensive, measurable mechanisms to provide training, facilitate skills transfer and unlock opportunities in local communities.

Banks and would-be business owners must appreciate that a tried and tested franchise system allows for well-informed decisions to be made based on realistic financial projections, while also mitigating risk better than in the case of an independently owned business. There is no question that, no matter how good the business plan, when compared to an untested new business, a franchise is the safer option for both the borrower and the lender.

While not immune to the impact of the current economic climate, or the banks’ conservative lending policies, the biggest challenge faced by the franchising sector today, is in communicating the important role franchising can and does play in the economy, and to expand the concept into other industries. Countries such as Australia, Brazil, the UK and US have many more franchised industries than we do. In considering some of our country’s current challenges, I think that energy and water saving solutions, waste-recycling, health care and education, for example, offer excellent opportunities for franchise development. It is even possible that we will see the development of public-private franchise systems for the delivery of government services in the not too distant future.

In my capacity as the newly elected Chairman of the Franchise Association of South Africa, a voluntary organisation that has been representing the interests and growth of franchising in South Africa for the past 33 years, I invite all bona fide franchisors out there to join FASA and become part of what is undoubtedly one of the key representative associations in the country and be recognised as an ethical franchisor that is contributing to our country’s economic growth.

Aspiring business owners who are contemplating investing in a franchise system and business owners who dream of franchising their current business system, are invited to contact FASA, either by calling our offices on 011 615 0359 or emailing fasa@fasa.co.za, or by visiting our website at www.fasa.co.za to find out more about this incredible business format. To guide you through the maze of acquiring a franchise, FASA’s invaluable annual directory contains articles by leading experts who share advice and information on topics which all entrepreneurs should consider prior to taking their next business decision. It also contains a comprehensive listing of all FASA’s members with a snapshot of their profiles and value propositions. For more one-on-one interaction why not diarise the International Franchise Exposition (IFE) proudly hosted by FASA at the Sandton Convention Centre from the 17^th to the 19^th of May 2012. IFE is the biggest franchise exhibition on the African continent, showcasing both local and international franchise opportunities. When visiting IFE you will be able to engage in friendly conversations with franchise experts and seasoned entrepreneurs in an informal environment. For more information on the Franchise Expo, kindly visit www.ife.co.za.

On behalf of FASA’s Council and its Executive Committee for 2012, I wish you success in your franchise business ventures.

Jan Davel

Chairman

+27 11 615 0359

fasa@fasa.co.za

www.fasa.co.za