Johannesburg, 27th March 2013

South Africans have become used to our energy supplier ‘crying wolf’.  After the debilitating electricity blackouts back in 2008 when we all rushed out to buy generators and businesses geared themselves to operate with alternative power, Eskom has, over the past five years threatened power cuts which, by and large, didn’t happen.  Now, word out there is that this time it’s for real and South Africa can expect rolling blackouts this winter.

With the chaos at the Madupi Power station, maintenance woes at Koeberg and a narrowly averted strike at Exxaro in Mpumalanga, Eskom is once again appealing to the public and business to go easy on electricity usage.

At a series of regular breakfast seminars held by the Franchise Association of South Africa (FASA) for members, both franchisors and franchisees have voiced their concern that this second round of rolling blackouts will have an even greater impact on their businesses than those in 2008.  The general feeling was that back then businesses were at the edge of the economic recession and had the necessary reserves to withstand setbacks caused by the blackouts. 

According to Vera Valasis, Executive Director of FASA, this time round, for businesses across the board, but especially small independent businesses, these blackouts, coupled with the looming electricity and petrol hikes, could spell the demise of many small businesses.  “Whilst we are confident that those that are part of a franchise network have the advantage of a strong support system and have a better chance of survival, they are certainly not immune to the hardships that await us all.

Franchisees, as part of a network, cannot simply increase their retail prices to consumers to recoup their losses as they have to adhere to finely tuned franchise systems that have set bench-marking forecasts linked to price increases.”

The Franchise Association of South Africa (FASA), over the past two years, has worked closely with government on several initiatives to find ways to stimulate entrepreneurship and generate jobs. Their members have secured funds from the Jobs Fund and the association is looking at initiatives supporting the growth of black businesses.  Says Derek Smith, Chairman of FASA, “Whilst we have committed to helping more people to start small or medium sized enterprises in order to become self-sustainable in the future, these threatening power cuts and other onerous processes associated with starting small businesses will most certainly affect economic and small business growth – an area sorely needed to provide those much needed jobs.”

FASA appeals to its members and all in the franchise sector to focus on the basics of good business practices with effective labour planning, controlling input costs and retain sound inventory controls whilst bracing for the tough times ahead. True to the spirit of entrepreneurship, franchisors have always rallied together giving strong support to their franchisees, ensuring that the show goes on, their customers are satisfied and they continue to be successful.


ISSUED BY: GO Communications
ON BEHLAF OF: The Franchise Association of South Africa (FASA)
CONTACT: Giuli Osso
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