Have you ever toyed with the idea of becoming a franchisee? There are many reasons why franchising is a great option for business. Not only are you entering a tried and tested business model, but also you need not worry about creating the brand, organising the advertising or finding the premises – the business is already there and ready for you to take charge. To add to the benefits of franchising, you have the support of the franchisor, but at the same time manage the business as your own boss.
Commercial failure rates for franchisees are claimed to be significantly lower than reported figures for independent businesses… The economic climate has altered many times over the years but franchising still remains an attractive option for both new and existing franchisees.
Also, securing finance is likely to be easier than for a conventional start-up. Franchising is not an ‘industry’ as such, it is a way of doing business – the sector is therefore not overly dependent on, say, retail or real estate.
The Franchise Association of South Africa (FASA) has been the guiding force of franchising in South Africa and the growth and stability of the sector is largely thanks to the work that FASA has done over the years to promote ethical franchising.
Those who are members of FASA have voluntarily made a commitment to abide by the ethical standards laid down by FASA and the international franchise community. That in itself is an indication of their commitment to operating a sound and ethical business.
South Africa’s culture of entrepreneurship has always been in evidence in some form or another, whether in the formal business sector or the informal sector which is alive with entrepreneurs who start small street businesses in order to survive.
Over the past 12 years, entrepreneurship has become the focus of not only the business community but also of government who, through its funding agencies, is promoting small business and in particular franchising as the ideal way to develop entrepreneurship, tackle unemployment and ultimately grow the economy. FASA, together with funding agencies and the banks, is making a concerted effort to put in place initiatives to make funds available to emerging entrepreneurs.
FASA’s Vision and Mission of promoting self-employment and small business development is taking on new meaning as it joins forces with government and the business community to stimulate new business concepts, encourage entrepreneurship, create jobs and play a part in the skills development of all South Africans.
Buying into a proven turnkey operation has the advantage that it is an established brand with tried and tested operational procedures – which are probably the most important advantages to investing in a franchise.
Whilst it is not an absolute given, the very fact that on average only 20% of franchises fail compared to 80% of independent businesses, it is safe to say that buying into a franchise system is less risky as you are buying into an established concept with proven operating standards.
From the moment you sign on, the franchisor will provide all the necessary set-up support – from site selection to fitting and stocking the store as well as training and ongoing marketing support.
The benefit of belonging to a family of franchisees is extensive – from getting preferential financing through the strength of the brand to benefiting from bulk buying; from enjoying the fruits of new product innovation to reaping the results of pooled marketing resources.
As an independent business, you would never be able to benefit from the knock-on effect of being aligned to a well-known brand. The benefits of joint advertising maximise brand awareness and increases the profile of each and every franchisee in the group.
Considerable benefits for the specifiers too!
There are numerous benefits for architects and interior designers – and even developers and facilities managers – in dealing with franchisees within the flooring industry.
Perhaps one of the first considerations is that the franchisor has already vetted the company and found it to be competent, trustworthy, and of some substance. In turn, the franchisee will have undergone fairly extensive training in the complexities of the flooring product or system, together with regular technical updates from the franchisor – ensuring that the specifier is getting the very latest in technical and design trends from the company.
Also, the products or systems in question will invariably be well-known brands, which should bring peace of mind to the specifiers in dealing with a product or system from a manufacturer of international repute.
This aspect is also reflected in cases where challenges arise – either in product quality or installation – because the franchisee always has his principal to call on for advice and direction. Principals are always happy to help in order to protect the product or system in question.
There is also the possibility that specifiers can benefit cost-wise by dealing with a franchisee. Often – because of its bulk buying power – the franchising company is able to empower the franchisor with favourable selling prices, which provides the specifiers with high-quality floorcoverings at excellent prices comparable or even better than the industry norms.