A Tripartite Agreement Developed to Create More Opportunities for Entrepreneurs in Franchising
By Natalie Veli
At a media briefing I attended on 31 July, Taste Holdings, Nedbank and Brimstone Investment Corporation (Black controlled and managed investment company) introduced their tripartite agreement that is set to head the very first initiative aimed at providing entrepreneurs in South Africa with competitive funding. These potential franchisees would be those who, under normal circumstances would not have the necessary security in order to qualify for the franchise funding.
This project will introduce new applicants to a thriving business model thus reducing the risk of failure for new entrepreneurs as well as create a fine amount of job opportunities. They will receive extensive training and an enduring transfer of skills; this will in turn boost the South African economy in the long run.
The Fish & Chip Co. is a fast food franchise brand owned by Taste Holdings and was acquired in 2011. Since its inauguration they have opened up over 300 stores countrywide. This has made the creation of over 3,300 much-needed jobs possible.
The tripartite funding agreement is aimed at those who are generally young and inexperienced with an impaired credit record and would not have the required cash contribution. Potential franchisees will benefit from lower owner-contribution levels and minimal collateral requirements (20%), a five year repayment period at prevailing prime interest rates, a dedicated franchise business manager and a free two-day accredited financial management course. Those that lack security for the investment will have access to funding with the help of Nedbank. Franchisees invest a basic deposit of R12, 000 in cash instead of the standard R550, 000. The balance of the total set-up is what is financed through Nedbank which includes the working capital. Brimstone will give the assurance for part of the franchisee’s commitment.
This agreement was named “Sisonke”, Zulu translation of “We are together”.
“Taste has for a long time held the view that franchising is corporate social responsibility in action every day. By partnering in an innovative way, three corporates are making a unique contribution to the economy by creating meaningful jobs through sustainable entrepreneurship,” shares Carlo Gonzaga, CEO of Taste Holdings.
Carlo Gonzaga -CEO Taste Holdings
Mustaq Brey, CEO of Brimstone echoes his outlook. “Brimstone has thrived on its partnership approach to investment. This initiative is further testimony to that, as we have brought together two of our underlying investments in this tripartite initiative. Furthermore, it speaks directly to our social objective of having a positive social and economic impact.”
Sebastian Patel – Brimstone Managing Executive
“This agreement demonstrates Nedbank’s continued commitment to the development and growth of small business in the country which goes beyond merely providing access to finance, but also sourcing tangible solutions to make job creation a reality,” says Mark Rose, Head of New Business Development Nedbank Business Banking.
Mark Rose – Nedbank Head of New Business Development
Marcel Strauss, Managing executive of the Fish & Chip Co. mentions that the tripartite will add to the company’s BEE success and footprint in SA. 76.57% of the Fish & Chips Co.’s 300 countrywide stores being black owned. Fish & Chip Co. believe that the tripartite agreement will further develop the brand’s growth and market infiltration.