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SABizOps.co.za  News
Majority of Concepts are Home-grown
By: Standard Bank Franchising
Date: 2010/06/15
Unlike most other countries, where foreign brands tend to dominate the franchise market, around 86% of South Africa’s 530 franchise concepts were developed locally. The South African franchise industry contributes in the region of R256 billion each year to the country’s gross domestic product.
The retail sector is heavily franchised. Franchised businesses account for an estimated 12% of retail sales in South Africa. The retail and direct marketing sector is the biggest employer of all franchised systems in the country, with more than 117 000 employees.
A uniquely South African franchising concept is tandem franchising, perfect for those who are not ready to “go it alone” from the first day. This entails a joint venture arrangement between a franchisor-appointed mentor and a franchisee. The franchisee purchases a minority stake in the business and receives mentoring from an experienced member of the management team, until he or she has gained the knowledge and experience to run the business efficiently and independently. The franchisee increases his or her shareholding over time, while the mentor is
rewarded based on franchisee performance.
Tandem franchising has the unique advantage of empowering individuals to learn the ropes while being “attached” to a person who understands the business thoroughly. It also addresses the issue of a lack of capital at the startup stage. Franchisees are able to increase their shareholding using their share of profits. While this process takes place over time, franchisees have the opportunity to increase their skills and confidence in running the business.
This mechanism addresses BEE at both franchisee and franchisor level.
Article supplied by Standard Bank Franchising
For further information visit Standard Bank franchising portal
This article has been archived under Working from Home and Starting Your Business for your research purposes
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