This month we focus on franchising and meet our latest square peg, Andre Naude.
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How economic trends are shaping SA franchising

As franchising continues its steady growth in South Africa, economic trends are shaping the development of the franchise sector in interesting ways, says Gerrie van Biljon, executive director at Business Partners Limited (BUSINESS/PARTNERS).

Franchising in South Africa already boasts solid numbers: there are 627 franchise systems totalling 39 000 franchise outlets in the country; they contribute 12.5% to South Africa's GDP, and provide work for 325 000 people. Yet there is still some way to go, says Van Biljon.

Only 6.5% of the 600 000 small and medium enterprises in South Africa are franchises, compared to countries such as Canada, where almost 30% of owner-managed businesses are franchises. It is this somewhat low level of penetration that makes Van Biljon confident that franchising will continue to grow in South Africa, not only in real numbers, but also as a proportion of the economy.


Interests of franchisee, franchisor sometimes at odds

Buying a franchise is one of those big life choices at least on par with buying a house, choosing a career or relocating to another city. But apart from the fact that prospective franchisees will be putting their life savings and at least a few years of their life into the venture, there is another reason why buyers of franchises must be particularly careful, says Byron Jeacocks, BUSINESS/PARTNERS regional general manager.

Although much is always said about the win-win dynamic between the franchisee and the franchisor – the hard work of the individual franchisees build the brand on a local level, and provides revenue for the franchisor to build it on a national level – there are undoubtedly times when the interests of the franchisor and franchisee clash.

Jeacocks gives an example of a franchise outlet in a certain area which is doing particularly well. The franchisee is very happy about his profitability, and to a certain extent, so is the franchisor whose revenue is likely to be linked to turnover. But for the franchisor the success of the branch means there is probably room in the market for another branch nearby.

April 2016 / Vol.7.4


Are you a
square peg?

This quiz is not scientific but serves to highlight some of the key attributes of entrepreneurs or “square pegs”, as we at Business Partners affectionately call them. The quiz should give you some idea on whether you “possess” entrepreneurial qualities, or not. However, please remember that a positive outcome/score is not a recipe for success.

Take the quiz

What an advisor learned by running a new business himself

Andre Naude's drastic move to sell his financial brokerage after running it for 33 years had all the hallmarks of a mid-life crisis, but instead of buying a red sports car, he bought two filling stations.

It turned out to be the opposite of the usual mid-life-crisis folly. After a difficult first year and a half, Naude managed to stabilise the two Total garages on either side of Queenstown in the Eastern Cape and he has never looked back since.

Best of all, he achieved what he set out to do when he decided to sell the financial brokerage which he started in the late 1970s in Queenstown. “I was 54, and no longer interested in doing the same thing every day. I wanted to do something different...


BUSINESS/PARTNERS further extends services across Africa

Business Partners Limited, a leading risk financier for local small and medium enterprise (SMEs), has taken the first step to permanently expand its investment model across Africa, which over the last 35 years, has proven to be an effective method in strengthening the SME sector in South Africa.

On 12 April 2016, the company launched Business Partners International (BPI) Uganda, a specialist risk finance company that provides customised financial solutions, sectoral knowledge, mentorship, and other added-value services for formal small and medium enterprises (SMEs) across Africa, and opened an office in Kampala, Uganda.

Aldo Park
Location: Greenbushes Industrial Park, Gate 2, Old Cape Road, Port Elizabeth

Description: 598m² space available to let (Unit 9). The unit consists of one garage door with access to factory, an open plan reception, offices, toilets and showers. It includes 24-hour security with electric fencing and guards at access.

Rent:R28 800.00 excl. VAT pm (Prepaid 3 phase power & water charged separately)

Sharon Lines
041 367 1082
Industrial Park
Location: 289 Grahamstown Road, Deal Party, Port Elizabeth
The park is located within 15 minutes of the Coega IDZ, 20 minutes drive from the PE CBD and within 1km of the N2 off-ramp.

Description: 595m²space available to let (Unit 9), it can be used as warehousing facility or factories. The property has two offices, ablutions, and showers.

Rent: R34/m²

Sharon Lines
041 367 1082
Vacant Shop
Location: Langverwacht Road, Kuils River, Cape Town

Description: A 66m² shop is available.

Rent:R10 055, plus R12 000 deposit

Availability: 1 February 2016

Sharon Jacks
021 464 3645

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