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This month our focus is on the good, the bad and the ugly of franchising. Christo Botes discusses the steady growth in this sector; we meet two successful franchisees, Dries Coetzee and Mogani Padayachee; and Jeremy Lang focuses on what to consider when considering a franchise.
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April 2014   |   Volume 5.3

Signs of stability, steady growth in franchising sector

Nothing can seem to get the franchising industry down in South Africa – certainly not the sluggish economic growth of the last few years, says Christo Botes, executive director of Business Partners.

Now standing at 11% of GDP, it has become a well regulated sector that cannot be ignored. Botes quotes statistics that show signs of stability in its very core. No fewer than 46% of all franchisors in South Africa are older than 12 years and a whopping 75% is older than six years.

Apart from stability, the figures show continuing growth. In the financial year ending 2013, South Africa had 668 franchise concepts, up by 21% since 2010.

Success story:
Building a business on the bedrock of service

It may seem strange that an entrepreneur would name his business after a parched desert farm that had succumbed to drought after years of hardship. But Dries Coetzee says his father's farm Honolulu in southern Namibia, where he “grew up hard”, brought out the entrepreneur in him.

On a desert farm, you are forced to grab every opportunity you can just in order to survive. You learn thrift and how to make something out of nothing, he says. Today, Coetzee's Honolulu Mica in Springbok, Northern Cape, honours this legacy as a thriving, growing business.

Success story:
Big bet on the future of fast-food franchising

After a tough many years in which the restaurant industry was among those hardest hit by the global financial crisis, Mogani Padayachee, an experienced owner of many eateries, believes that the corner will be turned within the next year – and she is willing to bet on it.

The 51-year-old franchisee from Johannesburg is planning to open no fewer than three new restaurants, a Steers, Debonairs and Fishaways, at a new shopping centre opening up in April 2015. This is in addition to her existing Steers and Debonairs at the Pineslopes Shopping Centre in Fourways.

Wrong fit?
In franchising, it can be a fatal mistake

“If you're the kind of guy who likes to go to sleep early, don't buy a restaurant franchise,” says Jeremy Lang, regional general manager of Business Partners.

Stating the obvious? Perhaps, but you'll be surprised how many first-time franchisees make the mistake of buying a franchise that simply does not fit their lifestyles, he says.

In the world of start-up franchising, it can easily be a fatal mistake to make, because there is so little room for error. Very few people who buy their first franchise have the resources for a second chance once they've found out that the franchise they had set their heart on is actually not the right fit.
In this issue
Poll results Do you own a franchise?
  • Yes
  • No
  • I plan on purchasing one soon
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