Cash Converters Thrives with the “Reduce, Reuse, Recycle, Repurpose” Philosophy
With its number of stores expanding by almost 15% in 2017, Cash Converters’ strong growth has it bucking the uncertain SA economy that particularly bedevils the retail sector.
By the end of November, the company will have opened 11 new stores this year. Representation in Mpumalanga has doubled to four and a third store has been opened in Namibia. New stores are being added both in the company’s strongholds such as Gauteng as well as in more sparsely represented areas, such as the Garden Route and Free State, says Cash Converters CEO Richard Mukheibir.
New franchisees range from
- Namibian TV personality and Generations star Dalton Ashikoto in Windhoek to
- business-school graduate Eric Nkosi in Middelburg.
- Two husband-and-wife teams have taken up the franchising challenge at Germiston and Kempton Park respectively on the East Rand.
“We are well into the company’s expansion plan and aim to add a further 20 stores to the network in 2018 and another 20 in 2019,” says Mukheibir. “Buying a franchise remains a buoyant opportunity because it brings you a business of your own with reduced risk as part of a proven business model.”
The company’s expansion comes on the back of a strong 2016 performance, which included expanding into Limpopo where it was previously unrepresented and where it opened three new stores. In 2016, the company’s then 75 franchise stores processed 2.2 million transactions, consisting of second-hand goods, pawn-broking and micro loans.
These three strands of the company’s offering give franchisees multiple revenue streams, making a vital key to sustainability and growth in tough times, believes Mukheibir. An added competitive advantage to franchisees is that the company funds every franchisee’s payday loan book, to the tune of R1 million. This allows franchisees to keep their own funding in the business to increase their own stock in store.
The company’s franchisees also benefit from the lowest royalty structure in the industry, says Mukheibir. It prides itself on standing out in the franchise industry for using particularly clear and transparent methodology to calculate royalties and advertising contributions.
The company’s growth rate is on a par with the growth of retail franchising, according to figures recently released by the Franchise Association of South Africa (FASA), following their annual survey in association with Sanlam. This underlines the persistent popularity of retail despite the bad news about high-street names, says Mukheibir. In addition, the second-hand market is thriving because it chimes with the “reduce, reuse, recycle, repurpose” theme of our times.
New franchisees spend eight weeks in intensive training from signing to opening their store. The franchisee spends two weeks training at head office and then a further two weeks training in an existing store. During the second half of training, a dedicated store development manager trains the franchisee with his or her staff in the new store before it is ready to open.
“This is part of our strong support structure which enhances the reduced risks that attract franchisees,” says Mukheibir.
About Cash Converters
Cash Converters Southern Africa was co-founded in 1994 when Richard Mukheibir (Chief Executive Officer) and Peter Forshaw (Chief Financial Officer) bought the licence to establish a master franchise of the Australian brand, the world leader in trading and marketing second-hand goods and now the world’s largest cash and asset converter. Cash Converters Southern Africa purchases merchandise from customers, enabling them to have instant access to cash. Since 2007, it has also offered short term loans against a customer’s valuables or against their salary. Cash Converters Southern Africa is built on a solid foundation of franchisee owner operators, guided by core values of passion, professionalism, integrity, respect and collaboration. It has already empowered nearly 100 franchisees to run their own businesses and create their own wealth. Each franchise store, in turn, provides job opportunities for an average of 12 employees, each supporting about five other people. This network of businesses is supported by robust processes and systems and ongoing training programmes for franchisees and staff.
Dynamic growth of up to 20% per annum has created more than 80 Cash Converters franchise stores in Southern Africa (as at 1 July 2017). These stores process over 2.2 million transactions a year and have a combined annual turnover in excess of R1.2bn across all products and services.
They are part of the rapidly expanding Cash Converters International network of more than 700 stores around the world. These can be found in such diverse countries as Australia, the founding country, the United Kingdom, Thailand, New Zealand and the UAE, as well as South Africa. Cash Converters Southern Africa was a finalist for the Franchise Association of South Africa Franchisor of the Year Awards in 2014, 2015 and 2016.