Franchise business owners are waiting with bated breath for the outcome of the 2019 National Budget Speech to be delivered by the Minister of Finance. Photo: File

DURBAN – Franchise business owners are waiting with bated breath for the outcome of the 2019 National Budget Speech to be delivered by Minister of Finance, Tito Mboweni, as they seek more opportunities to increase their contribution to GDP.

Morne Cronje, FNB Head of Franchising, said that the Budget Speech is an important economic indicator that franchises can use to gain insight on the government’s plans on spending and economic growth for the year ahead.

He highlights potential National Budget Speech outcomes that could boost the confidence of franchises:

Relief 

Any form of relief that is likely to bring positive change, rebuild confidence and address some of the key challenges impacting consumers will be welcome by franchises.

Cronje said that consumer spending contributes a significant portion to the profit margins of franchises, especially in the food sector.

Economic growth

Rating agencies are keeping a close watch on South Africa’s performance and prospects for growth, which will impact our Sovereign ratings for the rest of the year.

Measures that the government puts in place to promote economic growth this year will be of interest to franchises.

Regulation 

Franchise owners will be looking to benefit from regulatory changes that aim to improve growth, operating environment and enhance participation in all facets of the formal economy.

Tax 

Based on the Mid-Term Budget Review in October 2018, there’s likely to be no major shake-up from a business tax perspective. The anticipated relief in tax will go a long way to boost the profit margins of franchisees.

Infrastructure investment 

Spending on infrastructure creates vast opportunities for franchise business owners, as well as job creation in the country. The government has signalled an intention to partner with the private sector to develop an infrastructure fund to increase investment in public infrastructure.

"Franchises that operate in South Africa should prioritise the National Budget Speech as key decisions announced by the minister have a direct impact on their growth," concluded Cronje.

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