The Franchising Industry Lends a Hand to Grow SMMEs
“We are at a moment in the history of our nation when the people, through their determination, have started to turn the country around.
Now is the time to lend a hand…
Now is the time for each of us to say ‘send me’…
Now is the time for all of us to work together, in honour of Nelson Mandela, to build a new, better South Africa for all.”
Cyril Ramaphosa, SONA 2018
Tony Da Fonseca, the Franchise Association of South Africa’s (FASA) Chairman met with the chairperson of the Parliamentary Portfolio Committee for Trade & Industry in 2017 to discuss better cooperation between government and the franchise sector in South Africa. Da Fonesca welcomed the commitment made by President Cyril Ramaphosa in the SONA speech about supporting small business and entrepreneurship.
“We are encouraged by the President’s promise to increase co-operation with business and look at ways to encourage entrepreneurship, youth training and job creation” says Tony Da Fonseca. “We are confident that the franchise sector can play a pivotal role through innovations like the development of social and micro franchising which hold enormous and largely untapped potential for the development of the economy and improve service delivery.”
President Ramaphosa confirmed that government would set aside at least 30 percent of public procurement to SMMEs, co-operatives and township and rural enterprises and would continue to invest in small business incubation. “It is our shared responsibility to grow this vital sector of the economy.”
As a sector that already contributes 13, 3% to the country’s GDP generating an estimated R587 billion through its 845 franchise systems, 40 528 franchisees and employing 343 319 people, franchising is perfectly poised to play an even bigger role in furthering small business development, skills transfer and job creation.
“As a successful businessman and former franchise owner himself, Cyril Ramaphosa is familiar with the far-reaching potential that franchising has in small business development, skills development and job creation, says FASA Chairman Tony Da Fonseca. “We are hopeful that he will look to us in the franchise sector to assist in building that ‘small business support ecosystem that assists, nourishes and promotes entrepreneurs’ that he referred to in his SONA speech.”
According to Tony Da Fonseca, much more can be done in the public/private development space. “The opportunities to transform government services, such as health care, water delivery, education and in many other areas, through the social franchise format, are enormous. Both locally and internationally, pilot projects in social franchising that operate on commercial principles, making enough profit to sustain operations and re-investing surplus profits into the community they serve, have proved to be viable.”
According to Tony Da Fonseca, the franchise sector is well-positioned to come together in a concerted effort to stimulate entrepreneurship and create much-needed jobs. Franchising in South Africa currently services around 17 business sectors – way behind countries such as Australia, Europe, Canada and the USA who boast between 25 and over 70 business categories. “The opportunities to expand into many more sectors and particularly in the social and services sectors of the economy are endless. We welcome the opportunity to work with government in creating an entrepreneurial environment that will grow investment confidence, introduce new small business concepts via the franchise system, accelerate BEE and enterprise opportunities, giving training to the youth and above all create those much needed jobs.”