Stay informed! Visit the SA Department of Health's website for COVID-19 updates: www.sacoronavirus.co.za

Sign In

Roz Sanfham

Roz Sandham, Franchise Training ExpertFranchising Trainer

Roz Sandham works at Franchising Plus as a franchising trainer. She held the positions of HR Director, Field Service Manager, Operations Manager and ultimately Operations and Training Director for McDonald’s South Africa.

Due to her success in the HR Director role she was selected for McDonald’s APMEA (Asia Pacific, Middle East and Africa) region’s Accelerated Executive Leadership Development Program where she broadened her experience and leadership skills in the areas of human resources, marketing, finance and supply chain.

Q&A with Roz Sandham

Our business is located in the UK; we were approached by a South African entrepreneur who wants to acquire a master licence for South Africa. What are the problems we are likely to encounter, should we agree to this?

South Africa has a robust franchise sector, with about 85% of concepts home-grown. This notwithstanding, there is a place for foreign concepts, with leading brands like KFC and MacDonald’s leading the charge. To ensure success as far as this is possible, the grantor of the licence must be prepared to provide extensive support and take a long-term view on returns. For example, our population figure stands at about 50 million yet the number of people with disposable income is closer to 10 million.

Taxation for companies, currently at 28%, is on par with most of the rest of the world and South Africa has a double-taxation treaty with the UK. The payment of licence fees is subject to exchange controls. At this time, exchange controls continue to be strictly enforced but they have been relaxed over time and there is an expectation that they will eventually fall away.

In the interim, permission to make such payments will usually be given provided that the fees are reasonable and the local master licensee can show that the transaction involves the transfer of meaningful know-how and creates realistic opportunities for the creation of new businesses and employment.

Who is the first professional person I need to speak to if I am sure that my business can be franchised?

Not so fast! We could refer you to any number of professional advisors but we feel that it is in your interest to study the articles we enclose before you do anything else. The information they contain will help you decide, firstly, whether your business is ready to be franchised and if so, whether franchising is indeed the best option. Once satisfied that this is indeed the case, let us know and we will offer you various options for moving forward.

I went for an initial interview with a major franchisor (name supplied); as a follow-up, they asked me to do an E-test (suitability test) which I passed. I was now asked to come for an interview with the company’s directors. What questions are they likely to throw at me? Also, what is the correct dress code for such an occasion? During the first interview, I felt hopelessly overdressed.

First and foremost, congratulations are in order. The company you are dealing with is highly reputable, and known to be selective in accepting franchisees. The mere fact that you have been called back for an interview with their senior people means that you are a very special person. To prepare for the interview, if you haven’t done so already, find out everything you can about the franchisor’s operation and the target market. Look on the Internet for publicity material on the company and the sector. If you have a specific location in mind that you want to propose operating from, do a viability study. On the day of the interview, arrive well on time.

How often is it necessary to update the operations manual?

It depends on the dynamics in your business sector. The manual must always reflect the current status of product know-how, systems and procedures used in the network. If significant changes occur, an update should be issued immediately. Otherwise, the manual should be reviewed at least once or twice a year, failing which it will become obsolete.

I operate a home repair service as a franchise. The business is doing well enough but I have a problem. Almost as soon as I have trained a new franchisee, he thinks that he knows it all and looks for ways to break away from the network. This means that I am effectively training a growing number of competitors. Sooner or later, this must affect the viability of my core business. How can I put a stop to this?

By offering value! No matter how simple your concept may be, you must try to give it some unique aspects which break-away franchisees cannot take with them. The following are just some examples – you need to pick the ones that are relevant to your type of business.

In addition to providing the usual aspects of ongoing support, really listen to your franchisees’ concerns then go out of your way to help solve them.
Build the brand so that it really pulls customers; if you can link this to a customer loyalty scheme, the better.

Develop a business management system that is unique.
Enter into supply arrangements that give franchisees genuine benefits.
Help your franchisees to grow their businesses by introducing add-on products or services.

Help your franchisees to grow as individuals by giving them opportunities to expand. This could take the form of turning successful franchisees into multi-unit operators, or mean involvement with franchisee councils or other advisory bodies.

Set up group benefit schemes (insurance, medical aid, pension plan etc.)
Bring the human factor into the equation; operating a business in isolation can be lonely, offer your franchisees a shoulder to cry on.

Ask Roz a Question

Roz has been consulting to various organizations across South Africa. She assists with setting up operational policies and procedures, executive coaching, training and development and franchising processes. She also does business coaching and mentoring for small businesses and entrepreneur development.

  • Please double check.