Breaking news: Dis-Chem to expand through franchising


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Dis-Chem

 

Please note – In line with our corporate strategy for 2010, all franchise stores have been allocated for this year
Building on one modest store which he founded in 1978, Ivan Saltzman has turned Dis-Chem into South AfricaÔÇÖs leading chain of discount pharmacy super stores and turned what was once a staid industry literally on its head. Currently, 34 branches are trading at prime locations throughout South Africa, and solid opportunities for further expansion exist. While Dis-Chem has no significant long-term debt and is able to fund expansion from its own resources, the objective is to speed up its growth by developing both company owned and franchised outlets with top quality individuals prepared to join a winning team.

Although the company has been on an aggressive expansion trail for several years, the business continues to be privately owned and good old-fashioned family values permeate managementÔÇÖs approach to the business. This creates fertile ground for expansion through franchising.

When Saltzman realised this, he called in one of South AfricaÔÇÖs foremost strategic thinkers and business expansion experts who, after conducting an in-depth investigation of the business and its target market, did not hesitate to recommend franchising as the preferred option for further expansion. Several months of hard work later, the franchise package is in place and the opportunity ready for take-off.

Opportunity of a lifetime

This creates exciting opportunities for suitable individuals. This prompts the question: ÔÇ£who is the ideal candidate?ÔÇØ He or she could be a pharmacist, obviously, but the opportunity is equally attractive to dynamic retailers. After all, the bulk of Dis-ChemÔÇÖs sales do not come from the dispensary but from retail departments which cater for customersÔÇÖ health and beauty needs in the widest sense of the word.

To be considered as a prospective franchisee, a pharmacist would need good business acumen and be a consummate retailer. A retailer without pharmacy qualification would have to employ a pharmacist to head up the dispensary.

This opportunity would also suit existing pharmacies wishing to join the Dis-Chem fold.

Structuring of the franchise

Mindful of the fact that the establishment of a Dis-Chem superstore calls for an investment of about R15 million, Dis-Chem offers suitable prospects access through a joint venture (JV). Under this scenario, the JV will be the franchisee and the incoming JV partner will be offered up to 49% of the equity. This would be subject to the JV partner being able to invest R3 million from own resources, with the balance to be financed by the bank. Outstanding candidates who do not have the full amount available may be offered a smaller share in the business initially, with an option to increase it over time.

The next step

Interested? Contact Shona at Franchising Plus on 011 453 4997 or email reception@franchisingplus.co.za

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