What is the future of fuel retailing in South Africa?

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The complexity of the fuel retailing sector and the myriad of issues that surround it are enough to make anyone’s head spin. For those operating fuel retail stations it’s like juggling multiple balls at once… on the one hand focusing on the challenges of the fuel conundrum in South Africa with its declining volumes and profit margins, and onerous legislation from both government and industry standards and labour issues. On the other hand balancing much-needed income streams from forecourt shops and other services with onerous franchise agreements. No other industry is as complex and as challenged as the fuel retailing sector.
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FASA welcomes CARtime as a member – A franchise option for an ever-changing world

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CARtime started 22 years ago in the Automotive service and repair industry. Based on international best-practice model from the developed worlds’ right-to-repair environment, CARtime found its niche market long before Right-to-Repair was legislated in South Africa. The Right-to-Repair legislation, introduced with effect from the 1st July 2021, allows the consumer to select where to repair their new vehicle, without effecting the manufacturer’s warranty. That is, the manufacturer cannot void the vehicle warranty if it is not serviced through their dealer network. This breakthrough legislation not only provides for increased competition and better prices for consumers, but also limits the sale of costly service plans by the manufacturer as part of the new vehicle finance plan. This new legislation, creates a strategic development in the motor vehicle industry that now offers relief to consumers who purchase new vehicles and reside in outlying areas who would normally have to drive long distances just to meet the manufacturers recommended service intervals.

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Navigating through commercial lease agreements and dispute resolution during Covid-19

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In March 2020, the President announced that South Africa would enter into a nationwide lockdown for 21 days. Now, more than a year later, most South Africans continue to work remotely resulting in an increase in disputes over rental payments as both commercial tenants and landlords still find themselves uncertain of their rights and obligations regarding lease agreements during these unprecedented times.

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Business Partners Limited calls to explore financing for vibrant franchise sector

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August 2021: According to the latest pre-COVID-19 statistics recorded in late 2019, the South African franchising industry contributes 13.9% to the national GDP with an estimated turnover of R734 billion and is one of the most resilient sectors already showing signs of recovery.

Jeremy Lang, General Manager at Business Partners Limited, encourages entrepreneurs to explore the opportunities available in this exciting sector.

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Remembering Tony Marchesini of H20

The franchise community extends its heartfelt condolences to the family, friends, and colleagues of Tony Marchesini – the previous owner of H2O International SA and long standing FASA member.

H2O International SA has the longest proven track record and over 21 years’ experience in providing South Africans with the very best water and air purification systems.

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Entrepreneurship & franchising to shape the future

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“Recognise us… and the role that we can play in rebuilding the economy.”

That was the mantra that echoed amongst the forty speakers at the Franchise Association of South Africa’s virtual conference held last week. Pertunia Sibanyoni, Chairperson of FASA in her opening said, “FASA’s virtual conference could not have come at a more crucial time as the business sector reels from not only the extended pandemic but more recently from the devastating fall-out from the recent riots. Everyone in business – whether directly affected or not – will feel the long-term effects of recent events as businesses try to claw their way back to profitability. FASA felt it was time to bring together all stakeholders to disseminate the challenges and changes and, in the words of John F. Kennedy, “ask not what your country can do for you; ask what you can do for your country.”

Over 40 key speakers amongst them scenario planner Clem Sunter, Gareth Ackerman of Pick n Pay, Chairman of Pick n Pay, Frans van der Colff, fellow of the Henley School of business, franchise stalwart Eric Parker of Franchising Plus, allied associations and franchisors in various sectors spoke with one voice to say to the government that if South Africa was to successfully recover from the ravages of the past year and a half, it needed to recognise that entrepreneurship, small business and franchising were the keys to unlocking future growth.

“Going forward, everyone must understand that government cannot provide those much needed jobs.” says Frans van der Colff, fellow at the Henley School of Business.  “Neither can big business, which is beholden to its shareholders and on a new path of restructuring to fit into the norms of the 4th Industrial Revolution. What is needed is a mechanism that creates opportunities, especially for young people, with the correct mentorship, education and training. Franchising, which spans every business sector imaginable and has those fundamental structures in place, is the one mechanism that can do just that.”

To this end, speakers were united in calling for an entrepreneurial forum, spearheaded by FASA that would bring together government, corporate companies, entrepreneurs and scenario planners to formulate plans to create new businesses that will give opportunities to entrepreneurs to set up viable businesses and create much needed employment.

According to scenario planner Clem Sunter, franchising is the ideal mechanism to do this and FASA the perfect vehicle through which ethical business practices can flourish.  “We need to think outside the box, create an ‘e-stock exchange’ where entrepreneurs can crowd fund for their ventures, bring in the banks to set up accessible small business loans, get big business to dedicate a percentage of their supply chain to small business and ultimately merge the township economy into the mainstream economy. But, underpinning all this is doing this within the framework of ethical business practices. Franchising has all those checks and balances in place to take some of the risk out of people starting businesses.”

Echoing these sentiments were speakers from the four business sectors that were highlighted at the conference – those from the Restaurant & QSR Sector, Services Sector, FMCG Sector and the Automotive Sector – who all agreed that the future success of their sectors lay very much in their own hands as collectives.

This was made even more evident following the horrific riots and looting that, whilst putting into focus the desperate needs of the population, also highlighted the inadequacies and apathy of government to acknowledge and protect the businesses that keep the wheels of the economy turning.

According to Gareth Ackerman, Chairman of Pick n Pay, it took the devastating riots for the government to realise the importance of the value chain created by business which ultimately keeps South Africa moving, fed and functioning.  “In the same way that Pick n Pay, through its hundreds of franchised stores, has given opportunities for entrepreneurs to own their own businesses and for small suppliers to feed into the value chain, future growth in the economy must happen in the smaller areas and businesses must invest back into communities. Doing that through the franchise business format, where the basic premise is that if the franchisees are doing well and making money, the franchisor will too – that makes for a win-win formula.”

Tony Da Fonseca, MD of OBC Chicken & Meat, which trades mostly in the township, city centres and tax ranks believes that “whilst we need to hold our leadership accountable for not protecting businesses in the riots, unfortunately as the business community we have come to realise that the future is in our own hands. This is especially true in franchising where our owner-operators are entrenched in the fabric of the community they serve. So intertwined is that community relationship that, in many of the riot hot-spots, local communities prevented these stores from being looted.”T

The Franchising in Africa conference, sponsored by Absa looked at how the franchising business format remained strong, even through the pandemic and how it could change in line with the new normal that lies ahead.  International franchisors and franchise associations shared their future strategies while research done by Afreximbank on the franchise potential in Africa and Lionesses of Africa on the role women can play in business, paved the way forward for franchising to take a leading role on the continent.

Legal experts in franchising and IP laws plugged the holes that the pandemic opened up on the legal front while franchise experts analysed the lessons learnt and the future of franchising. Alternate forms of franchising, such as social and micro franchising, were discussed as viable solutions to further expand the footprint of franchising.

The banking sector understandably has become more risk averse in these trying times but, at the end of the day, it is in the business of financial lending and whilst looking to mitigate their risks, will also be open to taking risks to either support existing clients or in financing new business opportunities that will definitely emerge post-crisis.  Says James Noble, Head: Wholesale, Retail and Franchise for Absa Business Banking, sponsor of FASA’s Franchising in Africa virtual conference. “As bankers, we have always worked closely with franchise brands, are able to audit their growth and ensure that new franchisees coming into their systems are well-supported and are set up with all the necessary financial supports to be successful. We welcome the initiatives that have come out of this conference and, as Absa, are ready to step up to the plate with funding solutions that can stimulate the growth of the franchise sector.”

To assist franchisors, franchisees and their staff who have suffered over this period, FASA has registered a FASA Social Inventive Non-Profit Company to start a concerted media and social media campaign to appeal for contributions which will then be administered and distributed to the most in need. According to Fred Makgato, CEO of FASA, “this specific franchise social incentive relief fund will appeal to the business community, entrepreneurs, stalwarts of the industry and the public to join hands with us to protect and assist those of us who have been worst affected.”

Getting franchising back on track

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FASA’s Franchising for Africa virtual conference on the 25 and 26th August 2021 will focus on steering the franchise sector to future stability and growth. Local and international franchise, business and legal consultants will weigh in on where we’re at and what needs to be done to take franchising to the next level.

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Saying ola` to Pedros – a seriously hot new bird in the chicken market

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The franchise market in South Africa is a highly competitive one as everyone is mad about chicken in any form or shape. Since KFC came into South Africa fifty years ago, Chicken Licken and Nando’s exploded onto the market in the 1980’s, the latter going on to global fame, the fast food market has always been hungry for the next new taste in chicken.

In Portugal, the rooster is a symbol of faith, justice and good luck and South Africans are mad about its unique taste. At Pedros their birds do just that; instil faith in the flavour, do justice to the grill and add a bit of good luck, because you’ll be coming back for more!

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South African women entrepreneurs persist, despite daunting challenges

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As women across the world have found themselves hardest hit by the pandemic – often having to balance work responsibilities with looking after family, the impact of how COVID-19 has affected them and their revenue generation as entrepreneurs will be one of the focus areas at FASA’s Franchising in Africa conference being held virtually on the 25 and 26 August 2021.

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Red flags to watch out for when steering the future of franchising

Paying attention to red flags and getting perspectives from economists, strategists and scenario planners on how recent events can play out in the future is tantamount to being able to see the way forward in the franchise sector.

Some of South Africa’s leading experts will review, analyse and recommend various scenarios so that you can plan the best way forward for yourself and your franchisees as well as your suppliers.  Everyone in your business from staff member, to franchisee, and supply chain plays an important role to a thriving economy.

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