The franchise sector, which in South Africa is represented in around 14 different business sectors, posted an estimated turnover of R734 billion in 2019, equivalent to 13,0% of GDP, with over 800 franchise systems operating through 48 000 outlets and employing close to 500 000 people - representing the highest and most diverse range of entrepreneurial endeavours.
By virtue of its unique business format, franchising was able to, in many cases, modify their business models to stay afloat, draw on their combined talent and resources and regroup to look to the future.
Some of the critical lessons gleaned from franchisors include:
Adaptability the name of the game
Traditionally, the franchise industry has successfully weathered difficult economic times with adaptability a primary aspect of its DNA. When a crisis occurs, the franchisor is already looking at how it can adapt so its franchisees can keep moving forward. That is the beauty of ‘the collective’ made up of franchisors and franchisees who, in times of crisis, come together to tackle the challenges, find solutions and forge a new path. A good example are those sectors which turned to on-line trade and home deliveries to keep their businesses going until they were able to resume full services, whilst others accelerated plans for new products and services to fill customer needs.
No one-size-fits-all solution
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.
Sorting the wheat from the chaff
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