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Ferial Haffajee: Managed by blacks, owned by whites

Apr 12 2019 05:00

"Are you the owner?" I often ask an excellent person at any of the many retail outlets I visit.

And the answer is most often "No."

At the risk of over-sharing, I am a big Sorbet fan. I like the prices, the local products, the ethos of founder Ian Fuhr and the rewards.

After it hit town, I stopped going my other regular haunts.

The shops I frequent are fully black-run from top to toe – literally. The staff are well-trained and excellent. The managers understand complex systems and because it’s an outward facing sector, their customer relations are often excellent.

But the stores I visit are not black-owned because the franchise costs are too high. Many employees want to be owners. I know there are black-owned Sorbet stores, but it seems the exception rather than the rule.

Then, Nandos. My other favourite. Happiness comes in the shape of a quarter chicken, spicy rice, halloumi salad. Their advertising campaigns are saucier than their peri-peri and the chain’s legendary support of the arts make it my go-to spot for chicken and feel good. Again, the stores are completely black-managed, but not black-owned.

I know that there are some black-owned Nandos outlets, but there could be more. South Africans eat chicken like Indians eat curry, and so the story is the same as Chicken Licken, Nandos, Mochachos and the myriad franchises where wings fly out of the door.

The retail home improvement industry is another example, as are coffee chains like Starbucks and Seattle Coffee.

For decades, the government has poured billions down the drain in state support for micro and small businesses that do not survive. State agencies sprouted like mushrooms to support the sector but they too often got mired in corruption and mismanagement to survive. And then they are shut down and new ones started in their stead.

Every time I look, there’s a restructure of small business support agencies happening. How many millions of good Rands have been spent on the administration of the agencies the state’s created to support small business?

Government money wasted

There’s a thesis waiting to be done. The ANC runs a developmental state which means it places great store in state-led development of the small business sector, but its record of doing so efficiently well and successfully is extremely chequered.

I’m not a free market nut who thinks the state should have no business in business support. Japan, South Korea and other countries have shown that state support can have a catalytic and evolutionary impact on the economy.

Not here, though. Government wastes money on this. It would be much better for the government to support the excellent black managers who run so many excellent franchise stores to buy their own.

There is an existing franchise support system in place so it would cut out the enormous administrative costs of a government trying to build one to be run by government bureaucrats who haven’t run a business in their lives and who treat the agencies as extractive industries to give contracts to cronies.

Supporting franchises could be cheaper, more efficient and a way to get black business people over the capital barrier on which they often come unstuck. Wealth studies show that a key barrier to social mobility is an absence of capital to start a business.

Because members of the black middle-class are often supporters of extended family, capital runs up the generations rather than down. There is often no wealthy relative who can guarantee a loan to start a business or to provide the start-up capital to pay the franchise costs.

This is not an argument for black people to become franchise-owners only. But it is an area of proven skill and talent; of management depth, and it could be catalytic for black ownership in cities and towns. 

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