According to the results of the FASA (Franchise Association of South Africa) Franchise Survey, just under one in two (46%) of franchisors have been in business for more than 12 years and 75% have been in business for more than six years. With this track record, franchising (including beauty and hair franchising) should lead the SME (Small & Medium Enterprises) sector as the key driver for economic growth, employment and social amalgamation in South Africa.
This is the view of Morne Cronje, head of FNB Franchising. He goes on to say that franchises and businesses need to offer ongoing value to their customers to ensure viability and sustainability in the long term.
“Looking at the economic conditions, consumers are looking for best value and will curbspending as much as possible as their expendable income reduces,” says Cronje. “Manyfranchisors have been trying to absorb costs where possible but rising costs such aselectricity and the knock-on effect of the increasing petrol price is starting to hit bothfranchisees and consumers.”
“Retailers and franchises should evaluate their offerings to ensure that they offer convenience in terms of location, variety and speed of service. Extending trading hours is one way of offering consumers convenience.”
Cronje explains that one of the most important exercises that franchisees need to go through is the creation of an effective business plan. The creation of the business plan is not only essential but vital since it will probably be the first document a financial institution will ask for.
“Product and service offerings should provide value and convenience which could include bundled offers, loyalty rewards and free delivery of goods bought online. Consumers like choice and variety, so the ability to ‘build your own product’ gives a business somedifferentiation in this competitive market place,” concludes Cronje.
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