Leaders from South Africa’s franchise industry agree the industry has reached a new stage and appropriate planning should be done to ensure the next phase in the industry’s development achieves what the country needs. Speaking at last week’s launch of a book on franchising in South Africa, co-authored by himself and Kurt Illetschko, doyenne of the franchise industry in South Africa, Eric Parker, pointed out that franchised businesses play a significant role in the South African retail economy.
At this stage, 12% of retail sales in the country are derived from franchised firms, but this will increase dramatically as the industry continues to grow further. However, without suitable planning, the risk is that foreign franchised businesses will flood the South African market – an attractive location for overseas firms to expand into.
This is why, according to Riaan Fouche, head of franchising at First National Bank (FNB), the local industry must focus on two ways of driving the industry into the new era. ‘Education about franchising is crucial for us to bring in a new generation of franchisors and we must look to our previously disadvantaged communities for this,’ says Fouche.
‘The other focus area is to promote innovation in new services and concepts to take account of the diversity within South Africa.’
The Franchising Association of Southern Africa (FASA), the industry body, has already begun acting on these focus areas. It recently announced a public-private partnership to provide mentorship and support for potential franchisors.
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