Harnessing Opportunities: Franchising’s Role in Western Cape’s Migration – Driven Growth
The Western Cape has witnessed remarkable population growth, soaring by 24% since 2021, according to Lightstone. This surge is primarily attributed to semigration of both businesses and families, fueled by the allure of remote work. The phenomenon stem from a shift away from corruption-plagued provinces further north, toward a more serene
, secure, and high-quality lifestyle. A key driving force behind this migration is the Western Cape’s reputation for efficient municipal management, with seven of the top ten municipalities nationwide nestled within the province. The City of Cape Town consistently claims the top spot among metropolitan municipalities.
Although Cape Town captures the bulk of this influx, smaller towns and cities are also experiencing substantial growth. Lightstone data indicates that semigration to the Garden Route surged by 35% last year compared to 2020. This trend is mirrored in towns like Malmesbury, where freehold property prices have soared by an astonishing 184% over the past decade. Notably, 41% of recent property buyers fall within the economically active age bracket of 36 to 49 years, reflecting the broader demographic trend in the Western Cape, where 41% of its 7.2 million population lies within the economically productive age range of 30 to 60 years.
Of significance is the financial capacity of semigrants to facilitate their relocation. The recent Knight Frank Wealth Report, a benchmark for prime property markets and global wealth distribution, indicates Cape Town’s substantial leap of 63 places on the Prime International Residential Index, surging from 94th to 31st.
Amidst change, opportunities emerge. The rapid pace of migration intensifies demand for housing, essential services, fuel, sustenance, and entertainment. This bodes well for both franchisors and franchisees. The question emerges: can these economically stable semigrants effectively transition to franchise ownership in this burgeoning environment of growth and promise?
Karen Keylock, National Franchise Manager at Nedbank Commercial Banking, firmly believes so. She asserts, ‘While many will continue remote work for companies situated elsewhere in the country, an increasing number have embraced early retirement or seized self-employment as a way to embrace the tranquil coastal lifestyle of the Western Cape. For these semigrants, franchising offers a compelling avenue, thanks to the myriad advantages intrinsic to this model.’
Franchising Offers a Multitude of Benefits
As per the Small Business Institute, a staggering 70% of small businesses in South Africa falter within their first five years. However, franchise networks provide an essential lifeline by elevating the success rates and durability of small enterprises. ‘Franchising enables individuals to embark on entrepreneurial journeys as small business owners, all while benefiting from the support and mentorship of an established brand,’ explains Keylock. She underscores that franchisees gain access to tried-and-true business models, effective marketing strategies, and continuous assistance from franchisors. Moreover, franchisors often conduct comprehensive location research, making the launch process easier by eliminating the need for extensive groundwork and exploration.
Keylock further highlights that franchising facilitates access to financial resources. ‘Financial institutions view franchises as relatively secure business prospects, resulting in ready availability of financing options. Predetermined credit criteria have been met by specific franchise brands, which simplifies the process for franchisees seeking funding. This accessibility to finance diminishes financial entry barriers and enables aspiring entrepreneurs to commence their businesses more promptly.’
The role of franchising in job creation also commands attention. Franchise operations predominantly exist in labour-intensive sectors, and flourishing franchise brands typically expand at a swifter pace compared to other types of small businesses. This aligns harmoniously with the Western Cape government’s Growth for Jobs strategy, aimed at fostering an environment conducive to private sector growth. As Cape Town anticipates an expansion of 900,000 residents within the upcoming eight years, the resulting job opportunities offer a promising prospect.
Thriving Horizons for Franchisors
This burgeoning growth not only holds promise for franchisees but also ushers in remarkable possibilities for franchisors seeking expansion, paralleled by the province’s resilient tourism recovery. With franchising flourishing within retail and hospitality sectors, a late last-year Economic Overview by Wesgro heralds positive news. The report affirms that wholesale and retail trade, hotels, and restaurants persist among the top five contributors to gross value added, signalling their significance as pivotal growth engines for Cape Town’s economy.
Amidst South Africa’s economic trials, these unfolding dynamics underscore that avenues of opportunity remain open. For those contemplating a move to the Western Cape, franchising emerges as a compelling endeavour that not only secures personal futures but also lends support to the economic landscape of a rapidly flourishing province.