Franchising 101

Franchising 101

Franchising in General

Franchising is universally accepted as one of the most successful business formats in operation.

Franchising is gaining increasing importance in the creation of small business opportunities, not only in South Africa but also internationally. Statistics relating to the economic contribution of the franchise sector on a global level are staggering.

In South Africa, with our consistent economic change, we must acknowledge the considerable importance of the franchise sector as not only a means of empowerment, but also as a mechanism for the transfer of skills and knowledge.

What is Franchising?

A franchise is a right granted to an individual or group to market a company’s goods or services within a certain territory or location through the application and adherence to a proven concept and business model.

Who is the Franchisor?

The franchisor is the owner of the brand and business system. This proven business formula includes branding, marketing, purchasing power, sector expertise, managing and administering the business.

Why Join a Franchise Organisation?

1. Inclusion in a proven business system
2. Access to an established skills base
3. Benefits of an established brand
4. Provision of skills development
5. Continual provision of support and assistance:
   –  Lease negotiation and finalisation
   –  Design and layout of premises
   –  On-the-job training of staff and franchisee
   –  Equipment and fixture, and fitting selection and installation
   –  Administrative control
   –  Financial management systems
   –  Marketing support

Do you face any risks?

All businesses are seceptible to assocated risks. These are mitigated through the following actions:

• Availability of sufficient capital
• Sufficient research on the part of the franchisee
• Compliance with the franchisor’s business system
• Commitment and dedication to the demands of a service driven business
• Properly selected, trained and managed staff
• Optimal business environment