800 Club fights for franchisees

Johannesburg - The Franchise Association of Southern Africa (Fasa), which has long been viewed as the champion of big franchise operators, is now gearing up to also fight for small, vulnerable franchisees.

Towards this end the organisation has created the Franchise 800 Club, a division that will focus on servicing small franchisees.

The change in focus is being brought about by Fasa chairperson Thulani Cele, who has been in office since last January.

Cele also plans to create strategic partnerships with government funding agencies to make finance easily available to young entrepreneurs.

"We want to partner with an organisation like the National Youth Development Agency so that Fasa will start having a profound impact in alleviating poverty in our country," says Cele.

Franchise 800 Club chairperson Bignocia Masinge says the club, which has 40 members, aims to be a network for experienced and inexperienced franchise owners.

"Our members will also benefit from free legal, industrial and labour advice," she says

However, Franchising Plus analyst Eric Parker is not too optimistic about Cele’s vision.

"The banks currently require that people should have 50% unencumbered cash before applying for a loan to buy a franchise,” he says.

He says that if a franchisee borrows too much money it will be hard to make a profit as most of the money earned will have to go towards repaying the loans.

One person who differs with Parker is Ismael Moloko, who runs six McDonald’s fast-food outlets in Eastgate, Alexandra and Alberton, among other places. He says the 800 Club will help educate small franchisees about the minimum quality of service and support they should expect from franchisors.

"When there are legislation changes that impact on franchisees, like the Consumer Protection Act, we are ¬given workshops that teach us how the law can be used to our advantage," says Moloko.

He also supports Cele’s strategy to form partnerships with government-run funding agencies.

"I think the partnership will work well because funding agencies need assurance that they will recover the money they have loaned out while Fasa is in a position to mentor young entrepreneurs and put measures in place to ensure that they repay the funders," he says.

 - City Press