Living life in the FASA lane

The fully sold-out expo proves that franchising remains one of the safest and most lucrative ways to be in business, continues to stimulate small business development and contributes almost 10% to the GDP of the country.

A recent franchisee survey conducted by the Franchise Association of South Africa (FASA) has revealed some interesting results showing quite clearly, why the failure rate of franchising is less than 10% compared to the over 90% failure rate of independent businesses.

According to Vera Valasis, Executive Director of FASA, the aim of the survey was to serve as a benchmark on not only performance of the sector but more importantly on the attitude and satisfaction levels of the over 30,000 franchisees that make up the backbone of the franchise sector.

"The most revealing statistic to come out of the survey was the fact that three in five franchisees had been in business for more than six years, with a healthy 39% in operation for longer than 12 years. That, without question proves the sustainability of the sector, even in the face of recessionary times."

More importantly, most franchisees surveyed (60%) were optimistic about the future of their businesses and claimed to have made an average gross profit of 32.6% in the last financial year. Slightly more than half of franchisees who participated in the survey claim to own one other business of the same brand and one in ten claims to own a franchise of a different brand.

According to FASA's newly elected Chairman and its first franchisee chairman in its 36-year history, John Baladakis, a multiple-store Pick n Pay franchisee, "This multi-unit ownership trend is allowing franchisees to move from being one-store owners to building their own successful business empire."

Diverse offerings

The Franchise Expo, a platform for both established franchise concepts and new up-and-coming business opportunities reflects the diversity of business sectors that franchise.

In the study, the largest sector was the Fast Food & Restaurant category at 20%, with retailing close behind at 19%. Business-to-Business Services and Childcare, education and Training and Automotive Products & Services occupy 21% of the franchise market (10% 11% and 10% respectively). The other categories (Health, Beauty & Body Culture, Real Estate Services, Construction & Related Services, Personal Services, Building, Office & Home services, Entertainment and Leisure) are 6% and smaller.

From the established and recognised brands such as Taste Holdings (Domino's, Pizza, Maxi's, Zebros and NWJ Jewellers), Spar, Subway, OBC Chicken, Melissa's, Mike's Kitchen, DIY Depot, Cash Converters and real estate brands RealNet and Rawsons to new concepts such as The Wunderbar, Bugman Pest Control, Defendoor, Inky Shop, Aluminium Network, John Dore Flooring, Men's Clinic International, Plastic Ideas and Stretch-n-Grow. The International Franchise Expo (IFE 2015) is going to keep the wheels of small business turning and help drive the economy.

With FASA applying to the dti to have its code accredited and become the industry Ombud and with accreditation as a professional body through SAQA on the cards, a Franchise Convention for stakeholders will take place on 15 April and two accredited training courses will run during the IFE.

For more information, go to www.fasa.co.za.