The Franchise Association of South Africa’s Awards for Excellence in Franchising, sponsored by Sanlam, reflects what’s trending in worldwide consumer circles and cements the franchise community’s commitment to growing the economy and to job creation.
The results reflect trends identified by the Nielsen Consumer 360 survey, which looks at the key drivers that will shape consumer opportunities until 2025. It shows that as South Africa’s population becomes more urbanised, with different product and service needs for the Generation X and Y’s, there will be a keen focus on the health and wellness sectors.
Health and fitness: The trends to watch
The FASA Awards this year clearly reflected those worldwide consumer trends in health and wellness in the two top awards:
Kauai as Franchisor of the Year – who continue to ride the trend wave in the health food revolution are reaping the rewards for their innovativeness.
“We are thrilled to be judged ahead of the curve both in consumer trends and in brand strategy, says Guy Le Ray Cook, Franchising Executive for Kauai. “Not only have we had our best year in 22 years of trading with 25% year on year growth and 4% improvement on Net Profit percentage, but we have upped our game in introducing innovative communication strategies. From being the first to market with our new app that includes order ahead, loyalty and cashless payments adding a minimum of 5% additional overall sales in loyalty transactions – to introducing our K Konnect platform that allows everyone – from kitchen staff to franchisees to get information and share day-to-day experiences on a live cell phone platform.”
Body20 with their Brooklyn, Pretoria branch taking the Franchisee of the Year Award – who’s 20-minute EMS (Electro Muscle Stimulation) training per week, has revolutionised how we keep in shape.
So confident are Body20 that their revolutionary EMS Studios will become one of the most influential fitness franchise companies in the world – they are opening new studios in South Africa at a rate of almost one a month and have already broken into the USA market with great success. Says Bertus Albertse, CEO of Body20; “The combination of state of the art EMS Technology, modern personal training and rapid fitness results make Body20 the most exciting franchise opportunity in fitness this decade. It’s a low-staffing business model, with fast break-evens and impressive returns – our 36 outlets in just over three years attests to that.”
Communication is the key to success
What has shown up quite clearly in the 2018 FASA Awards is the franchisor’s commitment to assisting franchisees weather the economic hard times through innovative communication strategies – whether through their field service monitoring or reaching their markets through the latest customer loyalty apps.
- Kauai who took a second award in Brand Builder of the Year is leading the way by establishing successful customer loyalty apps with key partners such as through the 93 Virgin Active Health Clubs and through Discover Vitality and Discovery Insure – building their customer base, raising their brand awareness and boosting their bottom line.
- Kauai’s field service consultant Lawrence Lindeque won Field Service Consultant of the Year through the effective business monitoring and mentoring of the franchisees in his area resulting in double digit growths in all his stores.
Contributing to job creation
Job creation is on everyone’s lips since President Cyril Ramaphosa set a goal of creating half a million jobs in the next year. A tall order, one might argue, but with franchising’s duplication model, this is the one sector that can make a meaningful contribution – the sector’s 845 franchise systems, 40 500 outlets employing close to 400 000 people and contributing 13.3% to the country’s GDP – is testament to that.
KFC took the Job Creator of the Year Award – with their 20 500 employees across 1 053 outlets since they opened their first outlet forty years ago, they take the lead in making an incredible contribution to job creation. If one adds the indirect jobs they create through their supplier network and partners, their contribution is compounded and to be lauded.
Hall of Fame Award salutes Ian Fuhr, the man behind the Sorbet brand of Beauty Salons
Behind every successful brand is an entrepreneur with the vision to take a concept and build it into a household name. This year the Franchise Association have honoured Ian Fuhr, entrepreneur extraordinaire, who revolutionised the franchising model with his Sorbet brands by redefining customers as ‘guests’ and staff as ‘citizens’ – putting service and support ahead of sales and profit. The culture he installed in his businesses is that, ‘if the service is excellent and the citizens feel validated and cared for… the money will automatically follow.”
Sanlam, sponsor of the FASA Franchise Awards is proud to be associated with the Franchise Association of South Africa, the body representing the franchise industry in South Africa. “South Africa is in dire need of economic growth” says Kobus Engelbrecht, Marketing Head, Sanlam Business Market.
“Franchising is an effective way to create new businesses as well as new employment opportunities that will stimulate this much needed economic growth. By recognising and rewarding outstanding performance in the franchise industry, we are building and promoting franchising as a business concept as well as an excellent career option.”
Vera Valasis, Executive Director of FASA, who has just returned from representing South Africa at the World Franchise Council reports that, whilst the effects of global economic turbulence is affecting some countries more than others, almost all report that franchising is still alive and well and making huge contributions in their respective economies and to franchising globally. “As a global phenomenon, franchising remains one of the drivers of entrepreneurship, small business development and job creation.”
Clean Out, Clean Up – And Win Big With Cash Converters!
Spring is on the way and Cash Converters is celebrating the season of renewal with a bigger than ever Spring Clean Sale – and this year it gives you two very different opportunities to cash in.
From 24 August to 2 September, you can help Cash Converters spring clean all its stores nationally by snapping up discounted items across all their different product categories. Then in the second phase starting on 3 September, Cash Converters returns the favour by giving away R200 000 over 20 days! A total of 100 customers will win cash prizes in this Spring Clean Special Draw of R10 000 per day from 6 to 25 September. To enter, all you need to do is sell Cash Converters an unwanted item that you have decided to spring clean.
Sorting through your cupboards for items that are in good condition but rarely used and that you are ready to sell could put you in line to be one of the lucky winners of a fistful of cash that will make your budget stretch further or give you a head start for early Christmas gift buys. If you have not yet managed to act on this year’s resolution to declutter your space, here is an excellent incentive to make good on that goal.
Many of us have items crowding our homes that turned out to be bad buys, were unwanted presents or are outdated for our needs. Trading in these items can help you trade up to something that suits you better – as well as giving you the chance to be one of the lucky cash winners!
Get ready to cash in on:
- Spare phones, computers or cameras
- Unused power tools or exercise equipment
- Unwanted jewellery and watches
- Unnecessary kitchen appliances and electronic goods
- Surplus gifts or inherited items
“Essentially, we are paying you to spring clean!” says Richard Mukheibir, CEO of Cash Converters. “Even if you are not fortunate enough to be one of our daily cash-prize winners, you will be cashing in on items you do not need. That is a welcome boost to anybody’s wallet with petrol prices and the VAT increase still eating away at our income.”
Apart from all the excitement around the opportunity to win big, the outcome is win-win for everybody, says Mukheibir. Whatever you choose to trade in for cash in hand could well become the treasure that somebody else has been looking for. He believes the Spring Clean process also has an important message for South Africans.
“We are specifically running this promotion during Heritage Month because it helps enable a key change in mind-set that we need to entrench if we are to live sustainably on our beautiful planet,” he says.
“It has been estimated that the City of Johannesburg’s landfills will be full in just six years’ time, for instance. But enabling items you do not need to have a second, useful life, or astutely buying quality second-hand items you do need, is taking action on the reuse, recycle, repurpose message of our times. That makes you one of the savvy consumers who are doing what they can to save our planet for future generations.”
Related: Cash Converters Franchise Listing
5 Ways To Teach An Old Business New Tricks
Cash Converters took a hard look at their product offering and realised that dealing in second-hand jewellery should become a major part of their product offering given the fact that the vintage trend really took root in the SA market.
Do you have hidden gems concealed in your longstanding product offerings? Taking a new perspective on buying and selling patterns established over nearly quarter of a century at Cash Converters Southern Africa made CEO Richard Mukheibir realise a business lesson he needed to put into practice – and one he felt worth sharing with any other SA businesses looking for a wakeup call that can help them grow in today’s slow economy.
Reinventing your brand to keep it fresh and successful means everything from refreshing your logo to sharpening your strategic vision, he believes. That led him to relook the company’s product offerings and spot the gap where they could supply better.
“Dealing in second-hand jewellery has always been a side-line for us, another minor part of the product mix we offer,” he says. “But as the vintage trend took root in South Africa, we realised that instead of just ticking over and maybe not even earning its floor space, this could potentially be a good earner for us.”
In just six months, the 13 pilot stores have already significantly outstripped their annual target and other franchisees in the group are clamouring to join the initiative.
Mukheibir has broken the experience down into five key learnings:
1. Extend the brand
The typical Cash Converters customer tends to be about 40 years old and male. But improving the jewellery offering, the company realised, could attract more female customers. It chose to start by focusing the extended product range on fashionable silver items to cater for women in their 20s.
Related: Cash Converters Franchise Listing
2. Establish a support team
Mukheibir did not hesitate to bring in expertise in this area, recruiting Scott Townsley to project manage the initiative. This enabled the company to leverage Townsley’s 21 years of experience in the jewellery industry with the likes of American Swiss and Arthur Kaplan. One of Townsley’s first moves was to establish alliances with jewellery workshops to machine polish second-hand jewellery and give the customer the reassurance of a third-party valuation certificate that can also be used for insurance purposes.
3. Price smart
Pricing reselling of second-hand jewellery at about half of retail prices for new products created bargains at the company’s jewellery counters. This made them all the more tempting to customers already attracted by their sparkling, nearly-new state and vastly improved display.
4. Display, display, display
Jewellery was previously mixed into the company’s display of other small, high-value items. Townsley pulled it out of there into a standalone display and devised a common merchandising formula, including layout and props such as charcoal-coloured display fabric to show off the jewellery to its best.
5. Success breeds success
“Jewellery is a luxury item, part of a consumer’s discretionary spend after the basics of food and clothing,” Townsley says. This means that sales staff need some creative flair as well as understanding the advantages of merchandising together a chain and bracelet that are part of a set. Staff also need to have the personality to interact positively with customers, as well as having confidence instilled in them thanks to being well briefed and trained to deal with questions during the selling process. Product-knowledge training introduced includes understanding hallmarks, basic familiarity with semi-precious stones and understanding the most popular types of purchases, from trending silver pieces to solitaire engagement rings.
The outcome of this initiative has been a win-win, says Mukheibir – enthusiastic and knowledgeable staff and a jump in the company’s jewellery business, with the new-look displays being rolled out as quickly as possible across the group.
“The initiative only needs minor realignments on the shop floor and implementation can be slotted into the company’s workflow without major disruption,” he says. “This brand extension required minimal investment for useful rewards. It shows how it pays businesses to re-examine opportunities that could be sitting under their noses.”
Key Phases Of The Franchising Relationship
Riaan Fouche, the Chief Operations Officer of Franchising at FNB Business, shares four phases of the franchising relationship dynamic as per the renowned Franchise Relationship Expert, Greg Nathan.
The relationship between the franchisor and franchisee is often overlooked by people who are starting out in franchising. This is one of the biggest mistakes that one can do; it creates a lack of mutual understating, it also has a direct correlation to the 10% failure rate in franchising.
Riaan Fouche, the Chief Operations Officer of Franchising at FNB Business says:
“One of the things that franchisors should manage is a healthy relationship with franchisees and that requires a multitude of human relations skills paired with technical support structures that enable a win-win approach between the two parties.”
Fouche shares four phases of the franchising relationship dynamic as per the renowned Franchise Relationship Expert, Greg Nathan:
1. The courting phase
This is the creation phase of a relationship; both parties are communicating and making an effort to enter into a business relationship. Franchisees and franchisors must have clarity on the relationship and business goals.
2. The “we” phase
This is the ideal phase to be at for franchisors and franchisees, working side by side to understand each other’s needs and fulfil them. However, a number of people neglect it which leads to misunderstandings and franchisees opting out of business.
3. The “me” phase
This is where franchisees start asking questions about whether they could do better on their own. This phase is a result of neglecting previous phases and not maintaining them.
4. The “rebel” phase
In this phase franchisees don’t want to hear anything they just want out.
“It is expected that many franchisors will be thin on time. However, this shouldn’t be an excuse for franchisors to neglect communicating and giving constructive feedback to franchisees. Creating two way and open communication enables franchises to grow their profit margins and higher more employees, which in the end is beneficial to all parties,” concludes Fouche.
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