Entrepreneurs – How does franchising work?

By Drum Digital
11 July 2016

A franchise is an agreement between a franchiser (who grants the franchise) and a franchisee (the recipient of the franchise).

By Vida Li Sik

Question: I’d like to invest in a franchise but I don’t know how it works. Please enlighten me.

Answer:   The franchisee is allowed the right to use the franchiser’s brand, proven business model and copyright, among other things, and in turn, pays royalties to the franchiser.

South Africa’s franchising industry contributes an estimated 10 % of the South African GDP. Most franchisers are members of the Franchise Association of South Africa (Fasa), which is a voluntary body that oversees the orderly conduct of franchising. Fasa might help you reach out to the specific franchiser that you want to do business with. You can also ask them about the cost of a particular franchise.

Besides joining an industry that is one of our country’s economic drivers, there are many benefits that you can derive from being a member of Fasa, such as exclusive funding for Fasa franchiser members through the Jobs Fund initiative, discounts and networking platforms, to name a few.

You can contact Fasa or Which Franchise for more information.

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