Pearls of wisdom from FASA's Franchise Conference

How Covid Restrictions Affected the Franchise Sector

“One thing we learned during Covid was that you are in the business of building entrepreneurs so you have to adapt to ensure you can keep stores open. One of the biggest challenges during Covid was having 70 staff and law-keepers coming in wanting to close us down as we could only have 50 people in the store.”
Tony da Fonseca, MD of the OBC Group

“We went through the 1998 economic meltdown and the 2008 financial crisis – both had a significant impact which in a way prepared us for Covid. During Covid we were called in to do a lot of scenario planning to assist our clients. If there was one thing that Covid taught us was that everyone learned to collaborate, franchisors, franchisees, suppliers, key stakeholders had to come together and work together to find new ways of doing things.”
James Noble, Head: Wholesale, Retail & Franchise Business, Absa.

“Rising interest rates, incredibly high food inflation, unprecedented levels of load shedding have added to the woes of an already economically distressed consumer. Roman’s Pizza’s focus on delivering a superior value offering has allowed our stores to grow revenue in these challenging times. We believe that the fast food sector will continue to prove to be more resilient than other sectors in the12 months ahead. We will continue to innovate in these challenging times to ensure that we always offer the consumer the best value proposition.”
John Nicolakakis, CEO, Romans Pizza

Survey shows franchise sector is resilient

“Research and surveys are, on the face of it, all about the cold hard facts of statistics and the numbers – what’s the turnover, contribution to GDP and how many outlets make up this important business sector – but in reality the success that is being celebrated with the release of the FASA Franchise Survey lies in the strength of the franchise system and the community behind the brands, the franchisees behind the businesses, offering their products and services.”
Margaret Constantaras, Research Head, Research EQ

“One of the benefits of Covid is that as a franchisor it taught us to be adaptable and helped us realise that we are responsible for franchisees and staff. We were determined to survive it and through it all, built resilience in the business.”
Richard Mukheibir, CEO, Cash Converters.

“Even with the significant loss of income during the pandemic years, A+Students recognised its responsibility as educators and adapted its business model to include online classes, ensuring that children would still get the optimum tutoring and that our franchisees could continue to educate and ‘grow one child at a time’. Many of our franchisees have doubled their turnovers this past year under our franchise umbrella that gives ongoing support through innovative campaigns that continue A+Students’ growth and success.”
Marlene Mouton, Founder, A+ Students

On the way forward

“It is in the franchisor’s DNA to want to continually grow his/her brand, increase footprint and increase profits through expansion but in these turbulent times, it may not be the best move right now. More importantly, and before putting those expansion plans into action, franchisors must consolidate their existing franchisee portfolio and attend to their current ‘family of franchisees’ – identifying who is struggling, surviving or soaring.”
Eric Parker, Director, Franchising Plus

“PostNet, as a franchise brand that has been trading in SA for 29 years is very aware of the challenges that we face every day. Load shedding has had a negative effect on our country’s economy. Our Franchisees have had to invest in infrastructure to ensure that we keep the doors open and are able to serve our customers. In these challenging times we have to have the right mindset to ensure we sustain our growth and profitability. The key is having a strong brand with loyal customers and franchisees that are committed and follow our business model.”
Chris Wheeler, CEO, PostNet

“Franchising is resilient but the downfall is implementation because growing business franchises too early when many are not ready to franchise gives franchising a bad name/ Going forward we need to stop the fly-by-night businesses and every franchisor’s credo should be to “award a franchise, not sell it.”
Eric Parker, Director, Franchising Plus.

“Thanks must go to the members of FASA who have and are upholding ethical franchising in South Africa and going forward it is about educating the consumer so that they do not buy into bad business practices.”
Tony da Fonseca, Past Chairman of FASA

The role of Government and working towards an inclusive economy

“My department will continue to ensure that the finance system is better aligned to the needs of SMMEs, as expressed in the recently gazetted SMMEs and Cooperatives Funding Policy. From the franchisors we have already funded, we have found them to be among the least risky SMMEs to fund so we are exploring innovative models to expand on the current franchise model, in partnership with entities like FASA.”
Stella Ndabeni-Abrahams, Minister of Small Business Development

“While the franchise sector has grown, it is disappointing that there are still not more women in franchising especially across more sectors.”
Pertunia Sibanyoni, Immediate Past Chair, FASA

“It is not that there isn’t available funding, it is that businesses are not funding-ready. Most people don’t know how to manage their funds efficiently and effectively.”
Alicia Logan, Membership Manager, Proudly SA

“We believe franchising is the way to go, which is why Inani developed a pool of talented people to work and build businesses in franchising. Together with FASA, we hope to accelerate the multiplication of proven industry transformation models and facilitate more support towards the capacity of talent pipelines and transformation projects as well as to increase the accelerated solutions towards inclusive education and empowerment of the franchising industry.”
Ornica Mukhavhuli, Inani Incubator Accelerator.

Thanks to a resilient sector

“Franchising is all about adaptability, and good franchisors will always not only bounce back but will kick in that entrepreneurial flair that got them started in the first place.”
Sasha-Lee De Bod Smith, Director, Franchising Plus

“We appreciate the eagerness and transparency of franchisors that opened up about their challenges but ultimately, as the survey results show, it has proved unequivocally that the franchise sector, through its business system of duplication and support, has all the makings to withstand even the most trying of times.”
Maria D’Amico, Chair, FASA

“As an association, FASA must be at the forefront of fighting for the survival of the sector – with government and with stakeholders for the benefit of existing franchisors, future entrepreneurs, the tens of thousands of franchisees out there who service the millions of consumers that make up our beautiful country.”
Fred Makgato, CEO, FASA