Report from Pertunia Sibanyoni – FASA Chair

Report from Pertunia

It is very encouraging that we haven’t succumbed to the menace and challenges the global Covid-19 pandemic has created over the past two years. Many sectors, especially those in hospitality were negatively impacted by the continued lockdowns and the alcohol bans, while other sectors providing essential services produced double digit growth. FASA weighed in on the attributes of franchising being able to adapt and innovate, and as with franchising all over the world, reflected the narrative of successful franchisors supporting franchisees and customers by pivoting their business models to better suit the changing marketplace.

We kick-started 2021 with the Board members reviewing FASA’s vision, purpose and strategic objectives. This was a follow up to a prior strategic planning session facilitated by RAIN, the outcome of which resulted in very robust and critically appreciated inputs from the members including the review of FASA’s value proposition and key stakeholders. This was done to ensure that FASA continues, as it enters its 43rd year, to deliver on its promise as the guiding force in franchising, contributing towards the growth, stability and sustainability of the industry whilst also promoting and advocating for ethical franchising.

CEO Appointment

Freddy Makgato was appointed in June 2021, his key role at FASA is to ensure that we offer a unique value proposition with continuous engagement with all our valued members, focus on strategic initiatives that will enhance the financial sustainability of FASA and provide direction and deliver on FASA’s key strategic objectives. Freddy has immersed himself fully into his role by having started to establish rapport with many of our members, revised the members’ value proposition with different membership criteria, formed strategic partnerships including with government and the Consumer Goods Council (CGCSA). We are looking forward to the value that Fred will add to FASA and the franchise industry.

Franchise Manager Occupational Training

Since 2011, the Franchise Association of South Africa and Inani NPC Incubator Accelerator, duly represented by Nico Botha, have been engaging with Services SETA with a view of establishing accredited occupational training for the franchise industry. In August 2021, Services SETA finally agreed to set up the Franchise Manager Occupational Training programme. As a result, FASA was tasked to identify and nominate Franchising Experts to form the relevant Community of Expert Practitioners. The role of the CEP is to formulate the training modules and assessment criteria for Franchise Manager Occupational Training and the first draft of the training manual will be published for public comments in 2022. This is a positive achievement for FASA in that for the longest time, the Association has advocated for a formalized recognised training module for the industry.

Code Accreditation

In 2013, FASA applied to the National Consumer Commission for the Franchise Industry Code to be accredited in terms of Section 82 of the Consumer Protection Act. The application was then escalated to the Department of Trade, Industry and Competition once the National Consumer Commission was satisfied that the application met all the accreditation requirements in terms of vetting. The DtiC, as the custodian of the CPA, is the final authority in determining whether the application meets all the requirements. In 2020, the DtiC raised certain queries, of a general nature, with FASA who responded to the queries in August 2021 and also held a meeting with officials of the DtiC in September 2021. The DtiC advised FASA that they are finalising their internal consultations and FASA’s recommendations will be tabled at their next board meeting and will update FASA in due course on how best to implement this critical initiative.

Gauteng Department of Economic Development & Department of Small Business Development

It has always been an imperative for FASA to have lobbying opportunities with key government departments for the benefit of the franchise industry. This was kicked started in March 2021, wherein I represented FASA at the Captain of Industries webinar hosted by MEC Parks Tau. At this engagement we started fostering relationships with the Gauteng provincial government and the Gauteng Economic recovery plan in respect of the 10 high growth sectors was shared. Subsequent engagement was after the unrest in July where an open discussion on how the public and private sector can collaborate to restore stability was held, in order to partner in rebuilding and take concrete joint action to accelerate job-rich growth in South Africa’s economic hub. Both Freddy and I have had continued engagements with representatives, attending their sessions and providing awareness of franchising and answering the call to entice some of our franchisor members to leverage the funding opportunities that exist in this space and to have a dialogue on transformation initiatives for franchise opportunities in areas where those brands are not represented. Follow up discussions are well under way to accelerate the collaborative efforts for the benefit of the franchise industry.

July 2021 Social Unrest & Looting

The social unrest and looting that erupted in July 2021 adversely affected the franchise sector both directly and indirectly with an estimated damage to franchised stores and infrastructure sitting at a staggering R20,48 billion.

In July 2021, FASA was invited to a meeting by the Department of Small Business Development to discuss the impact of the social unrest and looting on small businesses across the country. Eventually the Ministerial Task Team was established to collate information on the damage suffered by small businesses. In September 2021, the Department of Small Business Development announced Looting Relief through Small Enterprise Finance Agency (SEFA) and the DtiC’s Looting Relief Fund through the IDC. During this time there was a change in ministers which affected the momentum of bonding between FASA and the DSBS. FASA will therefore continue to engage the DSBD so that the challenges faced by small businesses in franchising and the advantages of franchising get government attention and necessary support, especially in the form of funding guarantees. FASA was not informed as to whether our members actually accessed the Relief Funds. The information about accessibility and availability of the FUNDS from IDC and SEFA were published on the website as well as through newsletters.

FASA Social Initiatives

FASA was one of the first signatories of the ground-breaking initiative by the Nikela Charity Funding & Development Fund, a Public-Private Initiative, driven by Civil Society with the full backing of Government and support from major South African business industries, with the aim of raising R1 billion every year for social upliftment. In 2019, the idea of Rounda was trialled at McDonald’s, Nando’s and Steers focusing on the voluntary giving programme of ‘Add-a-Rand’, where customers could add R1 to their bill. The total amount raised to date by the three franchise brands is in excess of R7 Million.

Following the rioting and looting in July 2021, which took its toll on franchised businesses across various sectors, FASA registered a specific franchise social incentive relief fund that would appeal to the business community, entrepreneurs, stalwarts of the industry and the public to join hands to protect and assist the worst affected. FASA appreciates the sector’s support for social initiative programmes and hopes to galvanise their support for FASA’s recently launched Social Incentive Relief programme.

Conclusion

Most importantly I would like to extend our gratitude to our valued members for your support and contribution to the franchising industry. Let’s continue to work together to take franchising to new heights and make a meaningful impact to the economy and the communities it serves.

Pertunia Sibanyoni