The number of franchised systems (or business networks) within the automotive aftermarket has grown from 60 in 2012, to 79 in 2017, shows the 2017 Franchise Factor report. Thirty of the 79 systems tallied this year are new franchised systems.
The automotive franchise aftermarket has also seen the creation of 803 new businesses and 5 573 new jobs over the last five years.
The estimated turnover of the 79 franchised systems is R32-billion in 2017, indicating the contribution these systems make to South Africa’s gross domestic product, says Franchise Factor author and owner Bendeta Gordon.
“In 2012 it was one-third of this figure.”
She adds that it is well-acknowledged that a sluggish economy, an uncertain job market and retrenchments in big companies habitually trigger growth in franchising and innovation in franchising systems.
“In 2017 this is especially true of the franchise sector within the automotive aftermarket industry.”
Gordon adds that these results are “not, in any way, just a flash-in-the-pan. We have been researching and tracking franchising for more than 20 years and, over the period, franchising has consistently proven itself to be the ideal business expansion mechanism that reduces new business risks, stimulates the economy and creates jobs”.
Franchise Factor’s research also indicates that 40% of franchisees in the automotive aftermarket are husband and wife teams. Also, around 13% are women and 30% black.
“Franchising is the route to meaningful economic participation for the majority of South African citizens,” notes Gordon.
“It creates capacity within the broader economic landscape at all levels through a proven business format, support, mentorship, skills transfer and enterprise development.
“Bottomline, franchising is a lower risk opportunity directed at offering black entrepreneurs entry into the mainstream of economic activity by making small- and medium-sized franchised businesses available to them.”
The Franchise Factor research report on the automotive aftermarket covers a number of sectors, including body repairs and services; glass repairs and services; maintenance and repairs; wash and valet; specialised fitment; tyre fitment and services; parts supply; vehicle tracking services, as well as battery repair and replacement.
The majority of the 79 franchised systems in the 2017 report – 28 – have ten or fewer stores, while only two have more than 251 stores.
Gordon says while the automotive aftermarket is “a flagship” in terms of sustainability, it can improve its marketing efforts significantly.