FASA's contribution to employment

Franchising in South Africa is under-utilized and is not given enough credit for the role it plays in the economy, in stimulating entrepreneurship, in establishing small businesses that make up the backbone of the economy and above all in job creation.

The Franchise Association of South Africa (FASA) believes that government is overlooking a vital sector that can help curb the alarming rise in joblessness. FASA, which has represented the interests and growth of franchising in South Africa for the past 45 years in South Africa, continues to appeal to government to consider the important role that this unique business system has played in fostering entrepreneurship, in the transfer of skills and in job creation and to partner with the sector to achieve their employment targets.

FASA would like to see government give more support to the positive role that franchising can play in not only stimulating the small business sector but in investing in social, micro and tandem franchising in various service delivery sectors. It also appeals to big business to look at the potential of using the franchise format as an expansion mechanism.

Franchising has proved that it can fulfil all the criteria for small business expansion through its over 700 franchise systems, over 68 000 franchise outlets and employing close to 500 000 people. Considering that the franchise sector in South Africa is made up of 88% home-grown concepts, this important business sector has shown that it can produce substantial small businesses that provide skills transfer and jobs.

As franchising in South Africa spans over fourteen different business sectors, the potential for further growth into other sectors is huge considering that in other countries, anywhere from 25% to 80% of sectors are franchised. The franchise community has the business format expertise to assist in the establishment of new franchises in a variety of sectors not yet franchised – be it in agriculture, manufacturing or even in government’s social services. But we need to mobilise business and industry leaders, government and civil society to play a part in freeing up economic regulations and find creative solutions to allow entrepreneurship to flourish.

Franchising has the ability to stimulate the economy on so many different levels – from conceiving those brilliant ideas that translate into new franchise concepts to duplicating those business formats to allow entrepreneurs to invest in their own small businesses. Once established, a franchisors’ network of franchisees continually contributes to skills transfer and in turn provides much needed jobs.

As the survey shows, the franchise industry accounts for an estimated 4,7% of employment in the country. Each franchise outlet employs on average 17 staff members – many of whom support extended families. Not only does a franchise system contribute extensively to job creation directly but it is estimated that for every 14 direct jobs, another seven indirect jobs are created through the network of suppliers to the franchise sector.