Franchising: Strength in the collective

franchising collective
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For franchise brands in particular, success going forward will require franchisors to support their franchisees and customers by pivoting their business models to better suit the changing marketplace. The very nature of franchising as a collaborative business structure lies at the core of its success.

Tony da Fonseca, MD of the OBC Group and immediate past Chairman of FASA.
Tony da Fonseca, MD of the OBC
Group and immediate past Chairman of FASA.

“Franchising is represented by the strength of the collective and highlights the importance of partnerships, which, if harnessed in the right way, can help us overcome this crisis. What it has done is forced us, as a collective, to re-look at new channels and new ways of doing business, accelerate plans for introducing new products and services and changing our media and customer strategies. We have always known that the franchise business format works in good times, and now we must all prove that it will also work during the challenging times. I believe franchising can do this and that we will bounce back stronger from this,” says – Tony da Fonseca, MD of the OBC Group and immediate past Chairman of the Franchise Association of South Africa (FASA).

As noted by FASA, many of their members are working towards incorporating changes in everything from introducing new products and services, re-designing supply streams to dove-tail with online trading, and to re-engineering communication strategies.

There is greater pressure on franchisors to up the level of communication and engagement with franchisees to ensure that as a group they weather the storm together and come out relatively unscathed and stronger for having worked together. As one franchisor stated; “We’re all this together. It is in all our interests – as franchisors, franchisees and suppliers – to work together for our ultimate survival.”

Akhona Qengqe, of KFC & immediate past chairperson for the Franchise Association of South Africa.
Akhona Qengqe, of KFC & Chairperson for the Franchise Association of South Africa.

According to Akhona Qengqe, Chairperson of FASA, it is important that assistance is given to franchisees so that they in turn can keep employees on the payroll and ride the storm in order to grow when the pandemic passes.

“Having a franchisor whose franchisees can rely on becomes even more critical during these times of crisis. Thankfully most franchisors have taken strong leadership steps – from giving added ongoing support when it comes to operations, adapting procedures and formulating future plans. In all this communication is the key to surviving the onslaught and facing the future together,” says Qengqe.

There is no one-size-fits-all solution to re-opening franchise systems post Covid-19. With franchises in around 14 different business categories in South Africa, the challenges facing franchisors varies – impacted by the regulations, its sector, the size of the franchise group, its maturity, business culture and most importantly its leadership. Those franchisors who got involved in finding solutions – whether in easing the royalty responsibilities to negotiating with landlords and suppliers – will be the ones to emerge stronger. A franchise brand’s track record and reputation will no doubt stand them in good stead as they navigate getting back on their feet again.

The old adage in franchising – that you cannot have a successful franchisor without successful franchisees -will sort the wheat from the chaff and it will be those franchise companies that work together to fight and overcome the challenges that will come out stronger.

“In times of uncertainty, we’ve seen people gravitate towards brands that they know and trust, and brands that they know that enforce processes and systems and standards, which is exactly what franchises do. We wager that the franchise industry will make a faster and better recovery post-Covid than most other business categories,” concludes Qengqe.

 


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