Johannesburg - Despite the economic downturn, the franchise sector continues to grow and outpaces growth in other business sectors.
The recent International Franchise Expo, which took place in Sandton demonstrated that franchising has held its own year-on-year in every respect – from showing long-term sustainability to showing a high level of optimism for the future.
South Africa has over 600 franchised brands and just under 40 000 franchised outlets employing around 350 000 people. The franchise sector contributes 12.5% to SA’s gross domestic product (GDP).
In SA franchising offers opportunities across a range of 17 business sectors. This ranges from fast food and restaurants (24% of the sector), retailing (12%), building, office and home services (11%), automotive products and services (9%), childcare, education and training (8%), business to business services (7%) and other smaller sectors like health, beauty and body culture, real estate, construction, leisure and entertainment and personal services (6% or less).
The 40 000 franchisees who own their own businesses in SA, think of their choice of franchising as the way to being their own boss. A recent survey conducted by the Francise Association of SA (Fasa) showed that they enjoy a business success rate of 90% and are 80% happy with their franchisors. They are 73% happy with their suppliers, 72% happy with their landlords and 72% are optimistic about the future of their businesses.
Franchise businesses have only a 10% failure rate compared to independent businesses where the failure rate is as high as 90%.
"We see franchising setting the pace, even in these challenging economic times,” said Henk Botha, franchise development manager: restaurants and quick service restaurants at Barclays Africa.
"Our partnership with Fasa has over the last decade grown from strength to strength. Absa prides itself in ensuring that we are continuously striving to find new and creative ways to help grow and support the industry."