Franchising will play a key role in unlocking Africa’s business potential over the next few years, and SA operators are in an excellent position to gain from this trend while boosting job creation, not just locally, but right across the continent.
So says Jan Davel, MD of the RealNet estate agency group and current chairman of the Franchise Association (FASA), who notes: “Africa is
the currently the second fastest-growing region of the world economically, with a young, increasingly educated and technologically savvy population.
You will not be alone
It is also experiencing rapid urbanisation and the rise of entrepreneurship, all of which is combining to create the perfect environment for the growth of franchising. However, SA franchisors – whether in fast food, eco-friendly energy solutions, training or any other of our many franchise systems – must realise that they will not be alone in recognising this opportunity.”
A recent World Bank study, he says, has already given many other companies and private investors around the world a “heads up” by predicting that emerging economies will grow at 4.7% a year from now until 2025, while those in the developed world are set to grow at only 2.3% a year.
Africa “an increasingly attractive business proposition”
“Tapping into the huge African market is thus an increasingly attractive business proposition, especially in the light of the ongoing economic woes of Europe and the US, and slowing economic growth in China.
“And while SA stands to gain much as it is increasingly recognised and used as a springboard into the rest of the continent, the local franchise sector, among others, will need to think big and act fast if it does not want to be outdone by huge multinationals that are practised at expansion and hungry for new territories.”
On the positive side, says Davel, SA franchisors not only exceptionally entrepreneurial but are way ahead on the learning curve, with business systems in place that are already proven to be appropriate for African conditions, and they may well be able to tweak these systems quickly and adequately when and if necessary.
Franchising to promote job creation
“In addition, the SA franchise sector already has sterling credentials in creating the small businesses and employment opportunities so urgently needed in the rest of Africa as well as SA. According to the Franchise Factor research statistics by Bendeta Gordon, franchising created more than 2300 new business outlets in SA and 28 000 new jobs in the years between 2008 and 2010, when formal sector employment was falling alarmingly.
“This is very significant in the light of our own government’s current focus on job creation, and should open the door to even more opportunities, such as the development of public-private franchise systems for the delivery of government services such as healthcare, housing and education which, once again, could be relatively easily transposed into other African countries.”