Cape Town - The business banking division of Absa Group [JSE:ASA] has beefed up its franchise unit to ensure that it meets rapidly growing demand, and is looking to assist franchising on the African continent.
Speaking at the inaugural meeting of the Pan-African Franchise Federation, Vera Valasis, executive director of Franchise Association of South Africa (Fasa), said now is the time to explore the opportunities that franchising can bring to growing African economies, and to expand the franchising business format to the continent as a whole.
South Africa has made inroads in the franchising sector since the 1960s, but Africa as a whole has lagged behind in franchise development, said Valasis.
Jeff Gable, head of non-equity research at Absa Capital, added that Africa’s 55 countries show a wide variation in economic experience, but in aggregate this $2 trillion economy is growing quickly.
Gable highlighted the continent’s rapid urbanisation as an opportunity for business to tap into new, fast growing consumer markets.
“As many people are expected to move to cities in Africa over the next two decades as moved to cities in China in the last two.”
Claasen said: “Franchising spans 17 different business sectors in South Africa and is also a major contributor to the South African economy, employing more than half million people and contributing over R287bn per annum in economic activities.”
Claasen added that Absa is the leading merchant acquirer on the continent and would provide innovative solutions, like the soon to be marketed Payment Pebble device which connects to a smartphone to process card transactions.
Fasa's new chairperson Derek Smith said through initiatives such as the Jobs Fund supported by the development banks, the government has recognised the franchising industry as the one area where creating new sustainable jobs can be achieved quickly and effectively.
“This new approach will without a question change the face of franchising and give a much-needed boost to small business development.
"Franchising can be the low-risk, high-reward route to owning your own business.
"It allows you to be your own boss, to build your business as far as your talent and ambition allows and beyond, and best of all, it allows you to reap the profits personally,” said Smith.
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