Local franchise companies are proving to be more resilient than other business sectors in South Africa, says the Franchise Association of South Africa (Fasa), which hosted the 2013 International Franchise and Entrepreneurial (IFE) Expo at the Sandton Convention Centre earlier this month.
Fasa increased the size of this year’s event by 25%, proving that, despite the lingering negative effects of the global economic downturn on business growth, the franchise sector seems to be heading for a full recovery.
“Consistent with its entrepreneurial charac- ter, franchising simply won’t be held back. Established franchise brands are forging ahead with expansion plans and many new business opportunities are breaking into the market,” says Fasa executive director Vera Valasis.
“By the same token, people have become tired of the recession and, having been affected by downsizing, forced early retirement, or a lack of jobs in the formal sector, people are keen to take control of their futures and start their own businesses,” she adds.
Addressing Fasa members, industry stakeholders and members of the media at the launch of IFE 2013, Fasa chairperson Derek Smith lauded exhibitors, whom he described as having “the courage of their convictions to invest in marketing their concepts at the expo, while operating in an economy that is daunting to the most experienced of businesspeople.”
Smith further praised entrepreneurs currently fostering new ideas and business concepts, as well as franchisers who continue to roll out new businesses.
“You are directly addressing the key ill of this economy – the lack of sustainable employment. For this, I salute you,” he said.
Meanwhile, the first day of the IFE 2013 also marked the inaugural meeting of the Pan-African Franchise Federation, hosted by commercial bank Absa, in collaboration with the South African Tourism Council.
The Pan-African Franchise Federation was formed as a result of a mandate to establish a franchise federation representing the sector in Africa, issued to Fasa by the World Franchise Council’s executive committee.
Valasis believes the time is right to bring African countries together to explore the opportunities that franchising can create for growing African economies.
“It is now time to play a bigger role in promoting franchising and expanding this unique business format not only to a select few countries but also to the continent as a whole,” she says.
Absa economist and keynote speaker at the expo launch Jeff Gable confirms that, in spite of South Africa’s economic woes, global business is focused on Africa, which has one of the fastest growth rates in the world.
Citing a 2012 Africa attractiveness sur- vey by global advisory firm Ernst & Young, he points to the rise of foreign direct investment in Africa, which indicates that com- panies are optimistic about business on the continent.
Gable adds that the many critical constraints hindering development in Africa, such as infrastructure, agriculture and small business, can be seen as an opportunity to develop the continent into a future economic hub.
He believes franchising can play a key role in Africa, as urbanisation generates a large domestic market, providing significant potential for new businesses.