- Players: Robert Storey and Rudolf Bornman
- Position: Franchisee
- Company: Pick n Pay
- Visit: pnp.co.za
How do you think being in the retail sector at corporate level helped you realise your dream of being a franchise owner?
Corporate helped me to gain the relevant experience that has enabled me to manage my business successfully. I started as a training manager in goods receiving and worked my way up to store manager.
I was later promoted to regional manager and then to general manager of Long Meadow Distribution Centre. This meant I had a good end-to-end view of the retail sector. I also completed my MBA at Henley during this time, which gave me a deeper understanding of the economic environment on both a micro and macro level and what factors will have an impact on your business.
Retail is very complex and as a good manager/owner you need to understand all aspects of the business to make it a success.
First, you need sound admin and accounting experience to ensure you manage your expenses and understand your business.
Next, it’s important to drive sales growth through sales promotions, because without sales growth your business will suffer. Finally, looking after people (your staff and your community) is one of the key values for us and also a principle on which the founder of Pick n Pay, Raymond Ackerman, built this company.
It’s important to ensure you have happy staff who feel cared for. They need to be managed with clear rules, expectations and processes to protect them and your business. Our staff face our customers daily and need to deliver excellent service to them.
What was it about Pick n Pay’s values that appealed to you?
Pick n Pay is still a family-owned business and a very strong brand in the South African retail market. Its focus is on long-term sustainability and not just short-term profits. Head office continues to invest in the brand’s sustainability and long-term growth.
As a franchisee with your own long-term growth goals, this is appealing. The company also has strong values that are very familiar to us and align to our values. Both my business partner and I know the Pick n Pay store processes from store operation to support, and this is a huge advantage for us.
With tight margins, you can’t afford to make any mistakes. We just have too much at risk and need to ensure we minimise that risk and get a good return on our investment.
Pick n Pay is a growing company and this also gives us the opportunity to grow our business. We have the opportunity to buy or open more stores due to the growth of the company.
It’s therefore very important to us to get our business profitable and paid off as quickly as possible, enabling us to open more stores as multiple-unit franchisees.
Why did you choose franchising?
My business partner, Robert Storey, and I wanted to run our own business. Franchising was the best way to enter the retail sector. Due to the competitive nature of this sector in South Africa, it’s important to be part of a strong brand to ensure that you as franchisee are successful and get a good return on your investment with long-term growth and sustainability.
Pick n Pay is a strong, established and successful brand, with a tried, tested, and above-all proven franchise model. While I was researching which brand I wanted to invest in, I looked at various business models and the Pick n Pay franchise model was the best fit for us.
We both had many years of experience in the corporate world, and the brand and its values were appealing to us. We’re proud to be ambassadors for this brand, and that’s the way franchisees should feel. You’re joining an existing system that stands for something.
What’s the biggest challenge you face as a franchisee?
Cash flow, cash flow, cash flow. Without a positive cash flow, you’re doomed. You cannot manage a successful business without managing your expenses and purchases. Without stock, you cannot grow sales and without sales growth you’re doomed.
Second to this is staff. It’s a challenge to get strong and reliable management and keep good staff. People do get other opportunities in life and they will naturally go for those opportunities once presented to them. That’s why you need to treat your people with respect and dignity and always motivate them.
One of our key principles is to treat our staff like family; we put them first. As owners we have a responsibility towards our staff. You need to reprimand and build them, encourage them and reward them for good work done. We believe this enables them to deliver excellent service to our customers.
How would you advise aspiring franchisees on navigating the industry?
Make sure that whatever you do, you’re passionate about. We’re passionate about food; I love good food. We’re also passionate about the business and serving customers.
If you’re not passionate about retail, it will drain you and consume you. I’ve seen people who have lost everything they invested, but I’ve also seen many more people being incredibly successful in retail. It takes hard work, long hours and passion.
It’s also critical to plan and manage your family time, which is one of the main reasons why I have a business partner; together, we can share the load. You must decide what’s important for you before you start. For us, balance between work and family is essential.
It’s also important to take on a business that you have sound knowledge of. You can’t manage a successful business if you don’t understand the processes end to end. Cultural fit is also essential. Do you fit in with the franchise’s company culture and values? Are your values aligned with the company’s values? If the answer is no, walk away.
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You can’t change their values if misaligned. You’ll just end up frustrated and unhappy, and there will be conflict between you and your franchisor. It’s a lose/lose situation.
Successful franchisees need their franchisor’s support and vice versa.
Finally, brand strength is an essential ingredient. How well is the brand supported in the market sector you’re operating within? When customers have a choice between various brands in a specific area, where do they choose to spend their money?
This is a critical factor as we operate in a very competitive environment and consumers are all under pressure. Choose a brand that has stood the test of time and that you can associate with. You need to be proud of the brand, as you’re essentially a brand ambassador as well as a franchisee. When your customers experience that, then you’ll be able to grow your business.
Why is it important for successful franchises to have a strong relationship with their banking partners, and how does it benefit the franchisor and the franchisee?
It’s important for us to have the support of banking partners that fully understand the business model. We’ve looked at various financial institutions and Nedbank was very professional. In particular, they support and fully understand the Pick n Pay franchise business model.
Banking partners aren’t there just to assist with the upfront investment. It’s even more critical that you have the support of your banking partner once you’ve purchased the business. You’re under huge pressure to ensure you implement the correct processes to manage your business without impacting your customers, and believe me, this is a challenge.
You can’t afford a drop in standards as customers will leave and not return. As a franchisee you need to ensure you deliver high operational standards, are compliant with your franchising agreement and that you’re a good ambassador for the brand.
Good financial management is an essential ingredient for all of these factors, and the right banking partner will assist you in this regard.