Looking for a franchise?
Figures show that the SA franchise industry has grown its turnover by 55% from R465billion in 2014, when the Franchise Association of South Africa conducted its first survey, to R721bn last year. Alongside this, the sector’s contribution to the country’s GDP has expanded by 62%, from 9.7% in 2014 to 15.7% last year.
Richard Mukheibir, chief executive of Cash Converters Southern Africa, offers four tips on how to find a good franchise opportunity.
Choose a credible brand: As you shortlist franchisors, go beyond what they tell you about themselves and find out what people are saying about them. Do social media searches. Your franchise fee should buy you a halo effect thanks to your franchisor’s good reputation. Too much negativity around a brand will affect the potential success of your franchise.
Look for a proven business model: A worthwhile franchise shares with franchisees the intellectual property it has developed over the years. It has created and grown this business model, knocking off rough edges and fine-tuning systems as mistakes become apparent. Check the brand’s news history online. Be wary of any franchise that claims to be perfect or invincible as nobody is.
Check support systems: Getting relationships and systems right is vital to business success. Make sure the franchises you shortlist offers you support in coping with legal compliance requirements and that those running the brand are in touch with what happens on the ground in the franchisees’ stores.
Follow the recipe: When you sign up with a franchisor, you receive access to its business model, including the “recipe” for running your franchise. This forms a kind of safety net so you do not need to “reinvent the wheel”. You can’t complain the business model does not work if you don’t implement it. This is one of those times you must follow the recipe to bake the cake successfully. If you don’t want to do that, rethink whether franchising is really for you.