We start off our latest newsletter with an exciting announcement. We will be adding a new section to our website that is dedicated to Women in franchising. Next, we inform our friends in the real estate sector of an outstanding opportunity to build their footprint in South Africa’s burgeoning townships. Moving on, we take a look at the latest developments on the legal front, examine the effect of the recent interest rate hikes on the restaurant sector and bring you some international news. We then discuss a few new books and conclude with a selection of questions received from readers.
Women play an important role in franchising but this is not widely recognised. We believe that this is counterproductive and are determined to help change it. To this end, we will be introducing a new section on our website named Women in franchising. To find out more, click here
Whenever the word strike is mentioned, employers tend to always overreact. Employers often do not know that there are a variety of legal requirements and procedures relating to strikes. Employers also often do not know that there also exists ways in which employers can defend themselves in the case of strikes. LabourNet is hosting a seminar on this issue to show employers in that strikes can be managed, that certain strikes are never allowed, and what exactly employers can and cannot do when faced with a strike. whichfranchise is happy to offer our newsletter readers free attendance of this seminar. For more information and to register, click here
According to press reports, Andy Tondi, chairman of the Association of South African Black Property Practitioners, called for initiatives designed to help black estate agents to participate in the current boom. He observes that while the real estate sector in general experiences a slowdown, activity in the so-called black townships is booming. There is a good reason for this. Traditionally, township houses were passed down within families from one generation to the next. Selling a property was not seen as a socially-acceptable option, but this is changing rapidly. Read more…
The Franchise & Business Opportunities Expo takes place from 7-9 September 2007. Now in its 15th year, this expo is a platform for franchise and business opportunities. whichfranchise will have a stand. Last year, our stand was the focal point of the exhibition and we fully intend to repeat this feat. To this end, our stand is equipped with computers linked to the Internet. This enables visitors to surf the net on the spot and check out brands that are not represented at the exhibition. Visitors can also register for the newsletter and advertisers can make changes to their existing profiles. If you do come to the exhibition, please make a point of visiting our stand to say “hi”. To find out more about advertising on whichfranchise and having a presence at the exhibition via the whichfranchise website please email anita@whichfranchise.co.za
In an unrelated development, FASA announced an initiative intended to help established entrepreneurs to expand their businesses by franchising them. The programme enjoys the backing of major banks and other members of FASA, and already has pledges for funding to the tune of R4 million in place. FASA’s chairman Kobus Oosthuizen is confident that the dti will match this Rand for Rand, a step that would ensure that the programme is sustainable in the longer term. Read more…
In an interview with Sunday Times – Business Times, FASA chairman Kobus Oosthuizen expressed the opinion that the lack of franchise legislation hampers the further development of the sector. He especially lamented the fact that there is no legal obligation on franchisors to provide full disclosure to prospective franchisees before they enter into a binding franchise agreement. Read more…
Early last year, a ruling handed down by a Cape Tax Court in favour of SARS to the effect that “royalty payments” are capital in nature and therefore not tax-deductible understandably caused alarm within the franchise sector. We wrote extensively about this topic in this newsletter’s maiden issue (June 2006) and on several subsequent occasions. Our regular readers may remember that even back then we considered it to be a “storm in a tea cup”. Read more…
It should be clear by now that BEE legislation affects every enterprise that continues to want to do business in South Africa. Small wonder then that it remains an evergreen topic, hotly debated whenever business people meet. The publication of the final codes has given new impetus to the debate. Read more…
Our web site – www.whichfranchise.co.za – contains articles dealing with several pieces of legislation that affect franchise operations, including the Competition Act, the Consumer Protection Bill and BEE-related legislation.
Rating agencies who offer to provide BEE certification to companies have sprung up all over the place. Given the relative “newness” of the sector, it will not come as a surprise that while some are excellent, others are less so. Where does this leave companies who want to be certified as BEE-compliant? Read more…
About six months or so ago, major players in the fast food and restaurant sector were quoted as saying that rate hikes in the offing at that time would not affect their businesses one iota. Judging by recent press reports, it now seems that they were overly optimistic. Famous Brands CEO Kevin Hedderwick concedes that growth during the first quarter of this year had slowed. Spur managing director Pierre van Tonder more or less agrees, saying that: “We have not had a decline in the number of customers that visit our restaurants but we observed a drop in the value of menu items they order.” Read more…
Franchising in the UK is on the up and up. According to the latest NatWest/British Franchise Association survey, the sector is growing twice as fast as the economy as a whole. It now boasts 781 systems with 34 000 outlets and directly employs over 371 000 people.
The Middle East region generates franchise-linked sales of $30 billion, with franchising growing at 27% per annum. Young entrepreneurs are especially keen to become involved, and an NGO in Dubai is dedicated to facilitating this.
Asia and the Pacific Rim report a strong – and ever growing – appetite for franchising throughout the region. The Chinese and Indian markets, with population figures exceeding one billion each, are at the forefront. Japan experienced some economic problems but these appear to be under control, and franchising is well established there since the 1970s. Australia and New Zealand, though much smaller, offer the attraction of communality of language, similar legal systems and consumer tastes.
According to Asiawide Franchise Consultants Pte Ltd, interest in franchising within the region is wide-spread, and growing. And a study undertaken by the World Bank in 2006 lists Singapore, New Zealand, Hong Kong, Australia, Japan, Thailand, South Korea and Malaysia among the top 25 best countries to do business in.
With BEE on everyone’s lips (and minds), the need for information on this topic is at an all-time high. Of course, there is always the Government Gazette, but for the average layperson, reading legislative text in its unprocessed state can become intimidating. Read more…
This book is a companion to the whichfranchise website. When it was first launched at the International Franchise Exposition (IFE) in May, it was such a hit that the first edition was sold out within days. Towards the end of August, an updated edition will be available at CNA stores country-wide.
Other titles published by Frontrunner that are of specific interest to the franchise fraternity are Franchising in South Africa – the Real Story and Become a Franchisee. These books, too, are available from good bookstores countrywide.
Every month, our panel of experts receives hundreds of questions on the topic of franchising. We respond to every question promptly via email. Some of those that we believe to be of interest to our readers are reproduced below.
Q: My business provides a service to truck manufacturers and transport companies. We are in business for eight years and currently operate company-owned units in several centres throughout South Africa. Our branches are profitable but staff problems at manager level prompted us to consider franchising for further expansion. Is such a business franchiseable, and are we big enough to take this step now?
For more questions and answers click here
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