With the economy showing a positive growth for the coming year and public and business sentiment on an all-time high, the Franchise Association of South Africa (FASA) is poised to spearhead initiatives and events that will nurture entrepreneurship, encourage small business development, add to skills growth and ultimately add much needed jobs to the economy.
The franchise sector has continued its growth trajectory despite the tough economic conditions of the past eight years, adding around 88 new franchise systems and 2 789 new outlets in 2017 – proving that franchising remains one of the soundest business formats, structured to withstand economic challenges. With a contribution of 13,3% to the country’s GDP through its 845 franchise systems, over 40 000 franchise outlets are giving direct employment to close to 400 000 people.
According to Vera Valasis, Executive Director of FASA, “the continued growth of new franchise concepts proves that franchising is the entrepreneurial heart of any economy – its growth might be temporarily curbed due to economic influences, but it remains the one business sector that is always innovating and has the highest success rate.”
Vera Valasis believes that on a global front, our changing world is opening up opportunities on the franchise horizon. “As spending patterns change, entrepreneurs will be looking at business sectors where there is an appetite for franchising and flourishing new industries will start to see the light. Niche markets are also offering one-of-a-kind franchises that give one the opportunity to get in on the ground floor of a new franchise trend.”
With the country’s renewed energy and more positive outlook, both on the political and economy front and for those wanting to go the franchise route, whether as a prospective franchisee or as a developer of a new franchise concept, FASA has the following events and initiatives during 2018 which include:
- The FASA Franchise Manual, the official annual directory for the Franchise Association of South Africa (FASA), is the ‘bible’ for the industry in South Africa. It lists all franchises but highlights in detail its accredited members and features practical articles – from how to evaluate a franchise to the legalities to setting up a franchise. Click here for your electronic copy of the 2018 manual
- FASA’s Awards for Excellence in Franchising, sponsored by Sanlam – the industry’s most prestigious accolades – takes place at a breakfast event at The Venue at Melrose Arch on Thursday 7th June 2018. FASA members can enter the Awards here. To book your seat to attend the Awards Event breakfast please email firstname.lastname@example.org – tickets are R290 excluding VAT per person
- FASA’s annual Convention, aimed at industry stakeholders as well as those wanting to franchise their business or purchase a franchise takes place at the Forum Campus in Bryanston on Thursday 28th June 2018. Convention. Delegates have access to attend no less than 50 lectures or presentations related to franchising. Click here to book your ticket to attend the convention. FASA members get a 50% reduction on the ticket price.
- As the economy recovers, FASA’s International Franchise Expo (IFE), taking place on Level 5, Entrance 22 and 25 of the Mall of Africa from the 29th June to the 1st July 2018 is where the who’s who of the franchising world will be on show to promote their brands and offer franchise and business opportunities. For more information visit IFE at http://ife.co.za/. Book your stand now – FASA members receive 35% discount on the cost of stands – click here http://ife.co.za/exhibitor-information/
The pubic are welcome to attend any of FASA’s events to learn more about the franchising business method. Members of FASA are given preferential rates to attend events. For more information contact email@example.com or call 011 615 0359.
WIN WITH FASA
Win tickets to attend two important franchise events – the FASA annual convention and the Franchise Expo. Win 2 free tickets to attend the convention and International Franchise Expo valued at R6000.00
The tickets include:
- Free attendance at FASA’s Franchise Convention on Thursday 28th June for two people where you will have access to over 50 lectures/presentations on the day and find out everything about franchising from the experts
- Two Free entry tickets to attend the Franchise Expo at the Mall of Africa from the 29th June to the 1st July
- Two Free 2018 Franchise manuals.
HOW TO ENTER
Send an email suggesting why you would like to attend this year’s convention with the header “FASA Competition 2018 – Entrepreneur Magazine SA” to Giuli Osso at firstname.lastname@example.org.
SA Fast Food Franchising On The Rise
Andre Beck, Sector Head: Fast Food and Restaurants at FNB Business, shares four key trends in franchising sector.
The fast food and quick service restaurant (QSR) sector continues to show steady growth on the back of what has been a tough economic climate in South Africa. With a contribution in access of 29%, QSR has by far the biggest share in franchising turnover.
According to the Franchise Association of South Africa (FASA), the franchising market is worth R587 billion Rand, which is approximately 13.3% of the South African Gross Domestic Product (GDP).
Andre Beck, Sector Head: Fast Food and Restaurants at FNB Business says, “Industry data shows that South Africa has seen more franchises opening fast food and restaurant outlets in spite of the floundering economy. This clearly paints a picture of a sector that is competitive and lucrative, and more importantly, it shows that the franchising has sustained appetite to grow further in the local economy.”
Beck shares four key trends in this sector:
1. Healthy food
Customers are mindful of what they consume more than before; they want to know which ingredients you have used to prepare their food. As a result, health centric franchise brands are penetrating the market.
2. Speed of delivery
Using technology to effectively serve customers; more fast food franchises have made it possible for customers to use mobile Apps and other digital tools to receive their orders quickly.
3. Free delivery
In this extremely busy environment, businesses have understood the power of bringing business to the customer’s doorstep step.
4. Month end peaks
A lot of consumers tend to visit food outlets during month ends to buy or eat with their families. This has become one of the most treasured habits for most families.
“Despite the intense competition for food franchising, this sector has exceptionally demonstrated that franchising remains one of the sectors that needs to be thoroughly explored to grow the economy and create job opportunities. As a bank, we continue to support businesses in this sector and firmly believe in their potential to flourish,” concludes Beck.
Despite the intense competition for food franchising, this sector has exceptionally demonstrated that franchising remains one of the sectors that needs to be thoroughly explored to grow the economy and create job opportunities. As a bank, we continue to support businesses in this sector and firmly believe in their potential to flourish,” concludes Beck.
The Simple Strategy That Grew Simply Asia Into SA’s Best Eastern Restaurant
The culture created by Mr Chai Lekcharoensuk, founder of Simply Asia Thai Food & Noodle Bar, helped turn his dream of traditional Taiwanese food into a successful and growing franchise. Find out how he got it right.
Little compares to the happiness that is felt across the table of a great meal shared with family or friends. Or to that moment when you experience the sights, smells and tastes of a new culture for the first time.
It’s an experience Mr Chai Lekcharoensuk, founder of Simply Asia Thai Food & Noodle Bar, wanted to create when he came to South Africa 25 years ago. Back then, he couldn’t find any Thai food that reminded him of home and so he opened Wang Thai Restaurant, in Cape Town, an upscale establishment that promised an authentic Thai dining experience: mouth-watering meals made by Thai chefs, using only the freshest ingredients.
“The success of Wang Thai inspired Mr Chai to make Thai cooking something everyone across South Africa could enjoy,” says Enzo Cocca, Group General Manager of Simply Asia. “And so, he changed the restaurant format from fine dining to family friendly restaurants – and the Simply Asia brand was born, with the first branch opening in Cape Town’s historic Heritage Square.”
Thai food was not unfamiliar to South Africans at the time, as Thailand was a popular travel destination. But Mr Chai identified an opportunity to bring speciality, authentic Thai food and trading formats to the market and, by 2006, the company had opened 12 restaurants.
Today, customers can experience the taste of Thailand at 64 outlets across South Africa, Zimbabwe and Botswana, as Simply Asia continues to grow its footprint across the continent. By the end of 2017, the restaurant count will increase to 66 – and 72 by the end of 2018.
Quality and authenticity
Every restaurant in the franchise chain operates on the same values that the very first restaurant was built on: quality and authenticity. It’s these values that Enzo believes sets Simply Asia apart in a market that is now crowded with a wide variety of specialist food styles and trading formats.
“Consumers have a lot of choice today. They can find high-quality, readily prepared food anywhere, from restaurants, to food trucks, to supermarkets. There are a lot of competent local and international traders entering the market every day, many offering similar cuisine.”
So, how does Simply Asia keep customers coming back for more – and appeal to new customers?
The answer to that question is in the question itself: “Customer retention has been key to our growth,” says Enzo. “We have to stay relevant to our customers and still be able to attract new customers every day.”
Simply Asia’s growth strategy centres on four pillars: training, innovation, partnering with the right people, and leveraging tools and technology that provide real-time insights into its operations.
“Franchise owners and their teams are continually trained and upskilled to ensure they always offer the best possible customer service and experience,” says Enzo.
He adds that a Simply Asia franchisee is not a hobbyist looking to make an extra buck but is a passionate businessperson who is committed to the values of quality and authenticity above everything else.
“Many of our franchisees own multiple stores and treat their investment as a serious business. We believe this strategy breeds a different calibre of franchisee – one who is driven and understands that the secret to success is hard work, respect and transparency.”
Innovation at all touch points
Underlying all of this is an aggressive approach to innovation, says Enzo. Innovation extends across product offerings and business models and it’s one reason why Simply Asia has maintained its relevance and appeal to new and existing customers.
“Innovation, to us, means delivering new experiences to our customers, whether that’s through more variety and flavours on our menus, our rewards programme that puts cash back in customers’ pockets, or through partnering with service providers like Uber Eats to bring convenience to our customers,” says Enzo.
In a market where customers are spoilt for choice and competition is high, the key to success is having access to the right information, at the right time, says Enzo.
“We control the entire supply chain, from Thailand right to our stores. When you work in the restaurant industry, control of your business processes is important. Information must be real-time and reliable so that you can properly manage your inventory and quickly make the right decisions as situations arise. If you don’t have that information, you can’t see where you’re going.”
For Enzo, the various tools within the Sage Evolution and Payroll solutions give him access to that information and allow him to analyse data in real-time to easily pinpoint issues and opportunities.
“In June 2017, we added 15 new items to our menus across our network of restaurants. As these items were perishable, we needed to optimise the ordering and delivery of fresh ingredients across our production facility, three distribution centres and, of course, all the stores,” says Enzo. “Sage gives us the insights we need, when we need them, resulting in zero wastage and optimal stock levels across the network.”
Transparency, trust, respect
Taking the guesswork out of supply and demand has given Enzo more time to visit Simply Asia stores and to spend time with managers, staff and customers. “At Simply Asia, we’re building more than just restaurants. We’re building opportunities for others and that depends on strong relationships built on trust and respect.”
Enzo has the following advice for anyone looking to either buy a franchise in a chain store, or to franchise out their own businesses: “The key to building a successful franchise group is to fully understand your market and your customers. This is your starting point. If you want to buy a franchise, be sure to interrogate the business model in detail and to get a clear picture of the actual results.”
The people of Thailand place a lot of value on hard work, balanced with friendliness and hospitality. Traditionally, people would greet others by asking if they’d eaten yet. This sums up the Thai way of life, which revolves around sharing and enjoying delicious food in great company.
“When you bring the flavours of another country into your community, something magical happens; a culture is shared between strangers. At Simply Asia, we enjoy nothing more than sharing an authentic Thai experience with our customers.”
*For more on the story, please watch the video here.
Franchising Sector Ready To Lend A Hand
How business can use franchising to improve jobs and support entrepreneurship throughout South Africa.
“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
The Presidents commitment to small business
The SONA speech by President Cyril Ramaphosa and his commitment to supporting small business and entrepreneurship has been welcomed by Tony Da Fonseca, the Franchise Association of South Africa’s Chairman, who in 2017 had already met with the chairperson of the Parliamentary Portfolio Committee for Trade & Industry to pave the way for greater co-operation between government and the franchise sector.
“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.”
Confirming that the growth of the economy will be sustained by small businesses, “as is the case in many countries”, President Ramaphosa confirmed that government would honour its undertaking to 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.”
Franchising is ready to play a larger role
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.”
That, together with the welcome measures by government to reduce the regulatory barriers for small business and the introduction of an innovation fund targeted at start-ups and small suppliers that could become supply chains to the franchise sector, will go a long way to opening the doors to small business expansion and the benefits to the economy that will flow from that.
The Franchise Association of South Africa (FASA) has always been a proponent of small business incubation and has, over the years, embarked on various public/private initiatives to grow the franchise sector. Their efforts have included youth cadet schemes through the Jobs Fund, developing micro businesses to become franchise-ready through the Department of Small Business Development’s Micro Franchisor Development Project and through various private initiatives with funders and franchise members.
The franchise sector to stimulate entrepreneurship and jobs
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.”
Mr President, the franchising sector is ready and able to take on the opportunities for ‘renewal and revitalisation, and for progress to build the fair, just and decent society to which Nelson Mandela dedicated his life.’
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