Consider these enigmas as outlined by President Cyril Ramaphosa at a recent Secondary Education Conference:
- that economies in Africa are unable to absorb a significant proportion of young people because the education system is not aligned to the needs of the country:
- that most unemployed young people across Africa are those who have completed secondary or tertiary education;
- by comparison, unemployment is lower among those who have little to no education.
The Franchise Association of South Africa has a message for President Ramaphosa… the solution is a shift in the approach to education to align skills and market needs and the franchising business model offers solutions right now!
“The concept of franchising offers ownership and employment to anyone who has an education with or without a degree – this is the message that seems to fall by the wayside time and time again”, says Vera Valasis, Executive Director of the Franchise Associationof South Africa (FASA).
“The concept of franchising simply cannot happen successfully without skills transfer and development taking place – a franchisor would train and develop its franchisees before and during the process of opening a business and furthermore oversee the success of the business on an ongoing basis” says Valasis.
The Franchise Association of SA has hosted their annual franchise expo since 1994 and thousands of young people have visited the exhibition stand over the years so the Association has first-hand knowledge of the resourcefulness, talent and entrepreneurial skills of South Africa’s youth – all they need is acmes to funding to make their dreams come true.
So often there is talk about funding having been set aside for unemployed youngsters to get into business – like the R4.5b allocated to the IDC four and a half years ago. There are many government funding agencies like Gauteng Enterprise Propeller, the National Empowerment Fund and the National Youth Development Agency, but through conversations with many disillusioned and disappointed applicants one needs to ask: why do these funding agencies make it so difficult for anyone to apply and succeed in obtaining funding?
“It should be a straight forward, simple application process incorporating certain checks and balances that can deliver a quick turnaround time. Very importantly most funding agencies do not provide funding for start-ups which really defeats the object.”
“The concept of social franchising is an untapped opportunity in South Africa“, says Vera Valasis. While the concept has been implemented in many countries around the world – in particular on the African continent – it is still in its infancy in the local market. Social franchising really means the application of the principles of commercial franchising to promote social benefit rather than private profit. Social franchising of course must be financially viable hence the inclusion of a donor or grant funder. So going back to the resourcefulness and talent of South Africa’s youth, their thousands of ideas for a business could very easily be converted into a social franchise incorporating government grant funding as well as funding from private business. These concepts do not require vast amounts of funding and can get off the ground in a fairly short space of time.
What are the major challenges that the concept of franchising in particular social franchising would address:
- Transformed ownership
- Skills development and business management education
- Rural establishment of business
- Lack of service delivery
The franchise industry hopes President Ramaphosa – who understands the concept of franchising better than most as he used to be the master license for McDonalds SA – is really serious about forging successful partnerships with business sectors to stimulate economic growth and create jobs. Hopefully there is an invitation coming from Ministers Patel and Ntshavheni to the franchise industry to engage with government on how to make funding available for the establishment of these thousands of entrepreneurial businesses which in turn will create thousands of business owners and jobs.