Prospective franchisees should not only consider those franchises that were successful before the Covid-19 pandemic, but rather those that have successfully adapted to the current environment.
Restaurant chain Nando’s licensed markets CEO Trudi van Niekerk on November 18 said that the business models of those franchises that were successful before the pandemic, may no longer be relevant in the current climate.
Speaking at a webinar hosted by financial services provider Nedbank about the evolution of the franchising industry, she advised that one should consider how brands have adapted to the pandemic, what measures they have put in place to assist franchisees and where they see challenges and opportunities arising from the pandemic.
Generally, she noted, it was critical for the brand to fit one’s personality criteria; and further, how one’s personality fits in relation to the franchise one acquires.
Van Niekerk put forward that newer franchises might present more opportunities for those with more entrepreneurial aspirations.
She also pointed to the need for proper funding. She emphasised that it was not enough to meet only bank criteria, but rather, one should have something to fall back on.
She pointed to the pandemic, which hurt many businesses, particularly in the restaurant business, highlighting the need to have a backup plan or some reserves to rely on in the event of adverse market developments.
PetroCONNECT co-founder Mark Harper, meanwhile, highlighted that those looking to enter the franchise market had to know how to work well with other people.
He emphasised that the partnership between a franchiser and franchisee was of paramount importance and that this relationship could either be difficult or easy.
He also noted the importance of a franchisee’s knowledge about running a business, pointing out that while there would be mentorship support from the franchisor, some background or training in running a business would be necessary for franchisees.
Nedbank Business Banking head of client value proposition Prithivan Pillay advised interested parties to call up franchise owners in the brand they are interested in, and try to gauge a sense of the brand’s success, professionalism and support system for its franchises.
He also emphasised that one should start within their budget, as there was always room to leave a particular sector and grow with time and experience.
Franchising Plus franchise development consultant Eric Parker said one should choose a franchise category you were interested in and would enjoy, and avoid those that you know nothing about.
In terms of opportunities, speakers mentioned that, owing to the pandemic, areas of growth had included storage, with businesses looking to scale down and needing places to store their excess goods.
There is also scope in courier franchises, with delivery services growing owing to lockdowns.
Speakers also mentioned technology as changing the way the franchise industry operated, which facilitated ease of doing business and streamlined administration tasks.
Moreover, technology also presents opportunities within the sector itself, such as through food delivery apps.