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The Mall Of The Future

Traditional malls are under threat. But the threat isn’t coming from online retailers. Instead, it’s a new kind of mall that’s causing an upset.

GG van Rooyen




Is the era of the mall over? In the United States, the country responsible for making shopping malls so ubiquitous, these megastructures are increasingly coming under pressure.

A 2015 report by Green Street Advisors, a real estate and real estate investments trust analytics firm in the US, stated that about 25 malls had closed in the last four years. It also said that 60 malls were on the verge of closing.

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What’s causing this? A big problem is the fact that once-dominant stores such as Sears, Macy’s and JC Penney are closing down. These anchor stores are disappearing, and malls are struggling to find replacements that can drive traffic and occupy gigantic retail spaces.

The birth of the outlet mall

Another concern is the rise of the outlet mall. What is an outlet mall, you ask? Two things define an outlet mall. Firstly, these malls tend to look very different from traditional malls.

Instead of large and expensive structures situated in the heart of cities, outlet malls are more basic open-air centres that can be found in the outskirts of cities. This means, quite obviously, that rent is much lower, which is what attracts retailers.

And what attracts shoppers? Cheap products. Outlet malls deal exclusively in affordably-priced fare. Importantly, though, we’re not talking about cheap knockoffs of big brands. No, outlet malls sell cheaper versions of goods from established and respected brands. Gucci, Prada, Hilfiger — these are the kinds of brands you can find at an outlet mall.

These shops might sometimes sell end-of-range or rejected goods, but this isn’t what they focus on.

They sell products that have been made cheaper specifically to be sold in an outlet mall — not massively cheaper, just slightly less ornate. A shirt, for example, might not boast as much embroidering as one found in a regular store.

The state of the economy


It isn’t difficult to understand why outlet malls are becoming so popular: Both companies and consumers are under economic pressure, so cheaper ways of buying and selling goods seem increasingly attractive.

Since the global economy in general (and the US economy in particular) took a nosedive in 2008, outlet malls have been springing up like mushrooms. While traditional malls are struggling, the number of outlet malls is growing, and not only in the United States, but in other countries as well.

China in particular has embraced outlet malls. Up until a few years ago, luxury brands were enjoying tremendous sales growth (about 20% to 30% year on year) in the country.

That growth has now plateaued completely, at least as far as traditional channels are concerned. Luxury brands are seeing great success in outlet malls, though. The majority of brands are reporting same-store sales increases of 30% – 40%.

Since it’s unlikely that the economy will return to pre-2008 levels anytime soon, the popularity of outlet malls is sure to grow.

Speaking at the FNB Franchising Leadership Summit towards the end of 2015, Pareto Limited CEO Marius Muller stated that he believed outlet malls will make their way to South African shores as well. In fact, we’re already seeing small-scale outlet malls being established locally.

Food, friends and fun

As people spend less time at shopping malls, restaurants are becoming crucial to increasing the time shoppers spend hanging around. More than ever, people love spending time at trendy restaurants, eating delicious food.

One need only examine the popularity of a restaurant franchise such as Tasha’s and a casual-dining operation such as RocoMama’s.

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In order to capitalise on this, malls are being forced to rethink their food courts. Cheap and quick food is no longer good enough. While fast-food businesses remain important within the mall context, sit-down restaurants that offer a relaxing environment are equally important. Shoppers no longer simply want to eat on the run – they want a place where they can meet up with friends, have fun and eat good food.

Redesigning the shopping mall


And what about traditional shopping malls? Muller, whose Pareto Limited is responsible for large and successful local malls such as Cresta, Sandton City, Menlyn Park and The Pavilion, sees the food court as crucial to the long-term survival of the traditional mall.

“People aren’t really spending less money at malls,” said Muller at the summit. “But they are spending less time there, and they are visiting less frequently.

“In order to ensure that people spend more time in malls, we need to focus on the food areas. Food has become a huge focus for many people. People socialise by eating out at restaurants. Malls need to position themselves as great places to meet up with friends and enjoy a good meal.”

With this in mind, Pareto is currently busy upgrading the food courts of both Menlyn Park and Cresta.

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Muller also believes that the overall design of malls need to be simplified and toned down. For a while, just about every new mall was themed by giving it a Tuscan or other similar design. Now malls are being built (or refurbished) to look clean, open and very minimalist in nature.

“The design of the mall should not take attention away from the stores. The aim, ultimately, is to allow stores to attract customers, which is why malls should be simple in look and feel. The focus should always be on the stores and what they’re selling,” said Muller.

GG van Rooyen is the deputy editor for Entrepreneur Magazine South Africa. Follow him on Twitter.

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Franchise News

Make Your Business The Talk Of The Town

Gone are the days that a Brand can think a national ad campaign will reap the awards without considering the impact on the local area in which it operates. Localised, customised messaging paves the way for communication that is genuine and relevant to customers. Localisation shows that a brand cares about its customers and genuinely pays attention to their unique needs.This is the way forward in digital advertising.





As the reach and versatility of social and digital media have expanded, they have achieved more than simply adding another useful channel to the marketing toolkit, says Richard Mukheibir, CEO of Cash Converters.

“These new channels allow us to drill down into market sectors and localities, interpreting our brand message to appeal at local level encouraging existing and potential customers to step into the store and explore our offerings,” he says. “For franchises particularly, these channels have transformed the way we conduct our marketing activities and liberated franchisees to talk more directly to their customer base.”

For some time, retail chains have tailored stock levels and ranges to each store’s local market and demographic, he notes. Franchises, on the other hand, tend to operate over a spectrum of centralisation. Some insist on tight control of menus or skincare treatments offered and the products used to deliver these, while others give franchisees more room to manoeuvre to suit their market.

One of the foundations of Cash Converters’ business is buying and selling second-hand goods, putting it into the second hand category as availability of and demand for these products varies markedly according to an area’s demographic. This variety might seem like a marketing nightmare for any brand wanting to create a national footprint but, in fact, it offers a two-fold opportunity to maximise brand impact, says Mukheibir.

“Our advertising agency does fewer national campaigns for us, instead developing a creative approach that defines the ‘mother brand’,” he says. “This can be carried through to local area marketing by our franchisees.”

Related: Cash Converters Franchise Listing

Templates for more traditional media channels from radio slots to lamp-post posters can then be applied by each franchisee to their store-specific brief, assisted and authorised by the company’s marketing team before broadcasting or publication. The team can also help familiarise franchisees with associated processes from booking advertising space to awareness of local bylaws regarding posting advertising material.

Like many other SA brands, Cash Converters includes newer advertising channels such as SMS, WhatsApp, Google and Facebook in its marketing mix. The company drives this centrally to ensure that content is in line with brand standards. The company’s local-area marketing manager Juan Botha gives franchisees seminars and step-by-step guidance on how to use these channels successfully, right down to a manual on photographing stock to appear at its best on social media. Cash Converters is seeing particular success through its use of Lead Gener8or™, a unique tool developed by South African digital agency Bastion & Flowe.

“What appeals to us is how this tool allows us to empower our franchisees to run their own cost-effective, bespoke local marketing campaigns in a radius around their store,” says Mukheibir. “Franchisees have access to a team of Bastion & Flowe’s digital marketing experts, while our central marketing department stays in control of the overall message, branding and how the ads look. Protecting the brand with consistent messaging that supports our company values is important for all our franchisees, plus the capacity to extend their marketing locally offers each of them the opportunity to improve their individual results.”

Lead Gener8or™ allows franchisees to target its advertising using insights from Google, Facebook, Cash Converters’ customer book and Bastion & Flowe’s extensive consumer database, explains JG Bezuidenhout of Bastion & Flowe. This ensures the communication reaches a carefully curated list of potential customers through optimised placement on Google, Facebook, Instagram or YouTube.

“A couple of centuries ago, town criers used to keep the public up to date on what was happening in their community,” says Mukheibir. “Social media is our equivalent of this today and we recognise that we still need to hone our messages carefully if they are to be heard above the digital clamour and, with Lead Gener8or™, succeed in making our businesses the talk of the town.”

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Franchise News

Servant Leadership Key For Healthy And Growing Businesses

The success of beauty brand – Sorbet – hinges on its people and their passion, argues its founder and CEO Ian Fuhr. Speaking at a UCT Graduate School of Business event in July, Fuhr said that if you focus on your people and create a working environment where they feel nurtured, cared for, content and inspired, they will be motivated to serve their guests to the best of their ability.





Servant leadership in business is important particularly in the South African context, says Ian Fuhr, founder & CEO of Sorbet – a leading South African beauty brand.

“It [servant leadership] becomes more important in the South African context because the country is highly diverse …it’s about race, it’s about religion, culture, and language,” Fuhr said during a roundtable discussion on his new book at the UCT Graduate School of Business (GSB) in July.

According to Professor Kurt April, chair of the Allan Gray Centre for Values-based Leadership at the GSB, servant leadership is a philosophy and set of practices that enriches the lives of individuals, builds better organisations and ultimately creates a more just and caring world. A servant-leader focuses primarily on the growth and well-being of people and the inclusive communities to which they belong. He adds that it starts with self-mastery. “If you cannot lead yourself, you will struggle to lead -diverse-others and head up organisations. It starts with the self, with true self-awareness that guides behaviour, choices and decision-making”.

According to Fuhr, building a successful organisation requires leaders to “accept and respect people who are different to us and to learn to live with each other”.

Related: Sorbet’s Ian Fuhr: Servant Leadership Personified

“There is no reason why we cannot build a rainbow community within our workplace. We have to understand each other, accept and respect people who are different to us, and learn to live with each other…and this is one thing we work on [at Sorbet] to get people to understand the importance of accepting and respecting people who are different to you. You might not agree with them but you need to respect that they have different views to yours and that you are not always right,” he said.

Servant leadership requires a paradigm shift and that you have to lead by example, Fuhr continued. In this spirit, he says the he personally does the induction training at Sorbet. “It helps that I am able to explain directly what’s important and why they [workers] have to believe what we believe in.”

The GSB regularly hosts business leaders to discuss and share ideas to improve business and society on its Distinguished Speakers Programme. Facilitating this event was GSB alumna, Heloise Janse van Rensburg  (MBA 2017), whose MBA dissertation was on “How the ‘Sorbet Way’ of Servant Leadership is Scooping Up Success”.

Fuhr established Sorbet in 2005 and it has become one of the largest beauty franchise businesses in South Africa, with just over 200 salons, including five stores in London.

Advising up-and-coming entrepreneurs, Fuhr said business owners need to have intuition “which tells you something is right”. “You have to have courage because there will be times when you want to throw in the towel… and determination because it’s a long journey. No business ever happened overnight. You should not be afraid to fail.”

In his book, The Soul of Sorbet: Building People, Culture and Community, co-written by Johanna Stamps Egbe, People and Culture Manager of the Sorbet Group, Fuhr emphasises the need to focus on employees and customers in order to grow a business.

“It’s like the age-old question: ‘What came first? The chicken or the egg?’ Similarly, in business we have to ask: ‘What comes first? The purpose or the reward?’ I believe that the purpose is paramount and the reward is the natural result.

“If you focus on your people and create a working environment where they feel nurtured, cared for, content and inspired, they will be motivated to serve their guests to the best of their ability with a positive attitude, and to touch the lives of those guests in a powerful way. This creates loyal guests who will feel good about themselves and enjoy visiting your business on a regular basis, and spending money on products and/or services.”

Related: Servant Leadership – Will You Serve?

Fuhr added that “lean and mean” businesses might well produce short-term profits for the shareholders, but sooner or later the culture will impact negatively on productivity.

“There will be nothing to inspire exceptional performance and the culture of fear will begin to debilitate the business. Negativity will spread like a cancer. Demotivation will set in and customer service will no longer take centre stage. Despite the fact that they might be earning a good salary, when people are discontented and disillusioned in their working environment and unhappy about the way they are being treated, their anger and frustration become directed towards their managers. The internal conversations become nothing more than moaning and bitching sessions and the biggest casualty, by far, is always the customer who is now just an interference in the ongoing battle between management and staff.

“A short-term profit obsession can sometimes lead to fundamental blunders, particularly when restructuring is overdone and the staff complement becomes so thin that the business can no longer effectively serve its customers.”

It is next to impossible to grow a business without focussing on the people that make the organisation,” he concluded. As Stamps Egbe has said:

“How will you grow your business if you do not grow your people…that is an important philosophy.”

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Franchise News

FASA Establishes Industry Specific Food Franchise Forum

The Forum is bound by a supplementary code of ethics for the franchised food sector and will adopt a series of monitoring measures by its measures.





The Franchise Association of South Africa (FASA) is delighted to announce the establishment of a Food Franchise Forum representing the majority of the household names in the casual dining and quick service restaurants (CDQSR) sector.

Based on 2016 figures, the franchise sector as a whole generated R587 billion in sales; this amounts to a significant 13.3% of South Africa’s GDP. Of this, the CDQSR segments contributed 29% of the total. The sector also employs some 65,500 people, the vast majority of whom were previously untrained individuals who otherwise stood little chance of finding employment in the formal economy.

More than six decades have passed since the CDQSR sector spearheaded the development of modern-day franchising. Franchising has subsequently made strong inroads into a dozen or so other industries, yet recently published research confirms that the CDQSR sector continues to play a dominant role in franchising as the chart below illustrates.

Whilst the Franchise Association of South Africa (FASA) operates under a government gazetted Code of Ethics for its 17 different sectors, the development of a Food Franchise Forum within FASA to liaise specifically on matters that have the potential to impact on the sector is an important step in the challenging food environment. The Forum is bound by a supplementary code of ethics for the franchised food sector and will adopt a series of monitoring measures by its measures.


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More than six decades have passed since the CDQSR sector spearheaded the development of modern-day franchising. Franchising has subsequently made strong inroads into a dozen or so other industries, yet recently published research confirms that the CDQSR sector continues to play a dominant role in franchising as the chart below illustrates.

Whilst the Franchise Association of South Africa (FASA) operates under a government gazetted Code of Ethics for its 17 different sectors, the development of a Food Franchise Forum within FASA to liaise specifically on matters that have the potential to impact on the sector is an important step in the challenging food environment. The Forum is bound by a supplementary code of ethics for the franchised food sector and will adopt a series of monitoring measures by its measures.

Indications are that the food sector will continue on its growth trajectory. This is of particular importance in the South African context because it creates real, value-creating opportunities for the establishment of sustainable small enterprises under franchise arrangements and further job creation. Moreover, the sector makes an important contribution to South Africa’s vibrant tourism industry.

According to Vera Valasis, Executive Director of FASA, “It is common knowledge that our sectors find themselves under increasing pressure emanating from an ever-growing number of legislative and regulatory interventions. This is not a specifically South African phenomenon. Similar roadblocks are popping up in other parts of the world, with well-documented developments in the US and the EU being cases in point. Some of the regulations these countries have enforced, or are considering, are onerous and threaten the very survival of many long-established food service operations.”

Chairperson of the Food Forum, Nazrana Hawa of Spur, which spearheaded the establishment of the forum under the auspices of the Franchise Association of South Africa comments, “Raising awareness about issues affecting our sector requires a united voice and a credible representative body mandated to speak on behalf of the sector.”

Examples of recent issues causing concern to operators in South Africa’s CDQSR sector range from the recent food safety scare, draft liquor policy and proposed smoking regulations. Other key projects identified for consideration are new regulations for food licences, labelling regulations, proposed requirements around gas installations, tax laws that may affect the sector and developments around landlords and rentals and the POPI Act.

According to Hawa, “Experience tells us that representations submitted to government by individual brands, no matter how well-reasoned, are unlikely to achieve the desired results. For the sector to be heard it needs to do so through a credible, representative body, mandated to speak on the CDQSR sector’s behalf.”

Related: Thinking Of Going Into Franchising?

Hawa continues, “As FASA is a well-established, representative body of long-standing, with strong local and international linkages and enjoying good relations with relevant government departments, members felt that setting up the proposed body under its umbrella makes perfect sense.  For the initiative to achieve its objectives, however, will require buy-in by most, if not all, of the credible franchised brands and from suppliers to the industry.”

Hawa notes, “Given that government has gazetted FASA’s Code of Ethics and has expressed the intention to adopt the code for broader use, further cements FASA’s standing as franchising’s sole representative vis-a-vis government and other stakeholders. The need for and value of the Forum is validated by the fact that major franchise companies have come on board including: Famous Brands, KFC, Nando’s, Taste Holdings, Fournews, Hot Dog Cafe, Barcelos, Pizza Perfect, Adega, Mike’s Kitchen, King Pie, Jimmy’s Killer Brands, Chicken Xpress, Kauai and OBC Chicken & Meat.

Hawa clarifies, “While FASA will continue to represent the interests of franchisors across a variety of business sectors, including the restaurant sector, the FASA Food Franchise Forum will represent the sector-specific and clearly-defined interests of the CDQSR sector only.”

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