Franchise Convention 2009
Recession? What recession? Franchising in South Africa is alive and well and getting ready for the next upswing! This is the message the sector sent out during Franchise Week, a five day-event filled with meetings, presentations, workshops and incorporating the International Franchise Expo (IFE), Africa’s foremost showcase for franchisors, funders and professional advisors.
Fittingly, the week culminated in the presentation of the FASA Awards for Excellence in Franchising where top performers were honoured for their achievements. As in previous years, the Sandton Convention Centre was once again the host; the professionalism of their staff and the central location of the venue contributed much towards the event’s success.
During the convention, presentations ranged from a bout of crystal ball gazing by Clem Sunter who offered an appreciative audience his view on likely developments internationally and in South Africa during the 2010s, to hard topics. These included:
- An explanation of alternative franchise formats, with emphasis on social franchising and tandem franchising. It is worth noting that these concepts are eminently suited to serving as foundations for the rollout of sustainable BEE initiatives as well as to provide much needed social services at a favourable cost/effect ratio.
- The impact the new Consumer Protection Bill is likely to have on franchising; it became clear that it will be substantial but franchisors who operate within accepted guidelines for ethical franchising should have little to worry about.
- The presentation of a White Paper on franchising which examines the past, provides an overview of the present and offers a realistic blueprint for the doubling of franchising’s contribution to the South African economy by 2014.
- During a luncheon on Thursday, Jomo Somo, soccer supremo and entrepreneur extraordinaire, was the keynote speaker. Turned out that in addition to all his other achievements, Jomo has some real-life experience as a franchisee. It is a little-known fact, for example, that Jomo was KFC’s first black franchisee in South Africa, and he spoke fondly of that time.
- On Friday, Justice Malala, political analyst with excellent connections and an uncanny ability to predict what’s likely to happen next in politics, mapped out likely scenarios for South Africa’s short- to medium-term future.
Cautious optimism prevails
While all speakers acknowledged that times are tough, they were unanimous in their belief that, firstly, South Africa is less affected by the current economic downturn than many of the so-called developed countries. Secondly, they pointed out that franchised networks are better equipped than independent businesses to pull through the slump more or less unscathed.
IFE 2009 attracted much interest
Although foot count at the expo was slightly lower than in previous years, those franchisors we spoke to told us that they were more than happy with the number and quality of people who had visited their stands. We at Whichfranchise had the same experience. Our stand, which formed part of the stand of our sponsor Absa Franchising, was a focal point of the exhibition from the moment the exhibition opened its doors to the public. Our exhausted but happy team can confirm that it stayed this way until closing time on the Saturday evening.
We informed visitors about the services we offer, encouraged them to subscribe to our newsletter and made valuable training materials available to them at rock bottom prices. Long before the expo closed its doors, we had resolved that we would be back again next year.
It became abundantly clear that while interest in franchise opportunities remains strong, the effects of the economic downturn and the implementation of the National Credit Act 34 of 2005 (NCA) limit many prospects ability to raise the necessary funding. No financier can escape this reality but Absa Franchising is going all out to ameliorate its effect.
At Absa Franchising, loan applicants have access to a team of franchise experts who provide them with useful advice long before they discuss funding. Once the stage has been reached when funding becomes a necessity, Absa’s experts work with applicants and their franchisors to develop bankable solutions where possible.