Survey shows the strength of the support system of franchising

In today’s difficult trading environment starting a business or even a franchise does not guarantee success but as one franchisee put it, “I would rather be in business within a franchise system than be facing all these challenges on my own.”

The Franchise Association of South Africa, in addition to conducting a survey on the franchise sector in relation to its franchisors, also surveys franchisees to find out how they are faring and what their challenges are. High on the list of priorities within the survey, which is sponsored by Absa, is their satisfaction levels in a number of areas ranging from satisfaction with their franchisor, their landlord, even their suppliers.

“All this feeds into keeping the relationship between franchisors and franchisees at a healthy level,” says Maria D’Amico, FASA’s Chair. “Being able to pick up undercurrents of uncertainty or areas that need improvement allows franchisors to step up their game and better service their franchisees. What is encouraging is that franchisees are optimistic about the growth of their businesses which means the potential for growth in our sector remains strong and positive.”

With most franchisors optimistic about the success of their businesses (at 98%) and franchisees buoyant about the future of their businesses, with 88% expecting to see growth in the coming year, it was interesting to see the levels of support given by the franchisor.

The survey showed that very large franchisees benefit from more training in marketing (92% T2B), medium franchisees from new product development (87% T2B) and on-the-job training (85% T2B), training at another franchisee’s outlet (87% T2B) and time spent training (87%); while 94% (T2B) of small franchisees benefit from a significant time spent training.

Good communication was the main aspect for giving the relationship with the franchisor a positive rating. It received above average mentions from franchisees in the following sectors: automotive products and services (67%) and building, office and home services (65%), retail (58%). Good training/ workshops was considered a benefit offered by franchisors in building, office and home services (52%), fast food and QSRs (43%) and retail (49%) to a greater extent than in other categories.

Small and medium franchisees were more likely to commend the training offered by their franchisors (44% and 46% respectively), while large franchisees mentioned their franchisor’s communication more (56%).

Taking the size of the franchisee into account, it was noted that small franchisees would like more support in marketing their businesses (22%), while very large franchisees requested additional support with on-the-job training (26%), more time spent training (14%) and being able to train at another franchisee’s outlet (13%). 56% of franchisees said they did not require any further support.

It seems that a good solid foundation – where the franchise support structure allocates time, resources and effort to continually support and grow its franchisee base is the secret to the success of a brand.