Survey Shows positive performance of franchisees
Despite the on-going recession that is impacting heavily on small businesses, the franchise sector continues to be resilient and franchising globally has fared far better than independently owned businesses – largely due to the strong business format and support system inherent in franchising. Franchising has proved, time and again to be a much lower risk investment than starting a new business, thanks to the business format that is founded on the power of the collective.
The FASA 2023 Survey, sponsored by Absa, clearly reflects the optimism and resilience in the performance of franchisees – with some sectors that have proved to be recession-proof or essential services showing better growth than others that are more susceptible to market fluctuations and economic strains.
It is encouraging in that, despite the enormous obstacles that franchisees were confronted with – and continue to be – they are displaying unbridled optimism for the future which bodes well for franchising in South Africa.
- From these findings, it is evident that the franchisor delivered on the promised ROI, resulting in nine in ten franchisees expressing good levels of satisfaction with the ROI. Real estate franchisees ((71%), building, office and home services franchisees (60%) and retail franchisees (52%) all indicated levels of extreme satisfaction that were above average.
- The franchisees that were especially optimistic about future growth could be found in the following categories: automotive products and services (100%), building, office and home services (98%), business-to-business services (97%), childcare, education and training (94%) and real estate (100%).
- Franchisees in dine-in restaurants (24%) and fast food and QSRs (26%) were less optimistic, believing that turnover would not change in the next financial year to a greater extent than franchisees in other categories.
- Very large franchisees were most likely to claim that break-even was reached within six months (66%), while small franchised outlets were above average in taking between a year and two years to break even (17%)
To protect, lobby, promote and develop ethical franchising across all sectors in South Africa with specific focus on transformation.