Rocomamas is a successful franchise from Spur Corporation. Photo: Simphiwe Mbokazi/African News Agency (ANA)
Rocomamas is a successful franchise from Spur Corporation. Photo: Simphiwe Mbokazi/African News Agency (ANA)
McDonald's is among the top franchises in the country. Photo: AP
McDonald's is among the top franchises in the country. Photo: AP
DURBAN – The Franchise Association of SA (Fasa) has released their franchise survey results and it shows that despite challenging conditions there has been growth in the sector. 

According to the survey, the franchise industry has had a turnover of R721 billion which is equivalent to 15.7 percent of the total South African gross domestic product (GDP). 

The number of franchise systems has also grown from 843 to 865. There are 45 011 outlets and 80 percent of them are owned by the franchisee. 

According to Vera Valasis, the executive director of Fasa, the survey showed growth and a high-level of franchisee satisfaction. 

Valasis said: "It is testament to the entrepreneurial strength of the franchising sector that, in the face of increased unemployment to 27.2 percent in the second quarter of 2018 and with job losses of -35 000 in the formal sector and -73 000 in the informal sector, there has been an increase in the total number of people employed in the franchise system – from 343 319 to 369 573".

On average, each franchisee employs 18 staff members including him/herself. There are 12 full-time employees and 6 part-time employees. The average ratio between staff and management in franchisee businesses is 1:8 with two people in management positions and 16 non-management. 

Franchisor Survey Highlights Franchisee Satisfaction Survey Highlights
Around one in five franchises have rebranded or changed the image of their franchise within the last year 84 percent of franchisees rated their relationship with the franchisor as very good or
good
One in three franchisors claimed that their annual turnover was more than R20 million. Franchisees remain positive about the future of their businesses, with 78% expecting to see growth in the coming year.
Estimated turnover generated for the previous financial year was R721 billion. 72% percent of the franchisees were very or extremely likely to consider the purchase of another store in the same network.
The number of international brands in South Africa has more than doubled in the past year from 12% to 27%. The average number of years franchisees are in business has remained consistent at 10 years.
12% of franchisors claim to have business outside African borders.
This is equivalent to 1 036 stores in the franchise population.
The median nett profit for the last financial year was given as 10,4 percent.

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– BUSINESS REPORT ONLINE