Franchise Association of Southern Africa Interview
February 28th, 2006To franchise or not to franchise? < International > Interviewer : Bruce Whitfield Interviewees : Kobus Oosthuizen (Vice Chairman) Kobus Oosthuizen, Franchise Association of Southern Africa Vice Chairman, talks about the franchising industry, and the disturbing number of franchising companies that go bust. One thing I quite like, is the ‘man in the van’ or the person in the van in the politically correct context. That is the sort of thing that is going to be promoted more and more, I would assume.
Yes, it is quite correct, also because of the fact that it is generally more affordable. Your risk is a bit less, premises are always expensive, and you must have a reasonable balance sheet before a landlord accepts you as a tenant. The ‘man in the van’ concept doesn’t require that. And that is definitely one of the reasons why it’s become so successful. Eleven percent of franchises go bust. That is a bit of a disturbing number. In the general small business environment that figure is at least four times as much so franchising really does give you better odds than a non-branded or non-associated business. So yes, small business always carries risk and in the franchising industry we just like to believe that the risk is a bit less. You can’t be an idiot if you go into franchise, you still have to pull your weight. You still have to make an effort to make it work, you have to work your fingers to the bone, if not more so, because there are still risks. Just because you bought into the franchise doesn’t mean you’re going to make it big. Absolutely. One of the first things that you will tell a new franchisee is that it is still your own business, you are still carrying the key and the buck still stops with you. We can assist you, we can guide you, we can help you in certain things and we are going to look after you in many respects, but eventually you have got to keep your own customers happy and you’ve got to manage your own people. |
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