FRANCHISING

FABCOS’ hands-on experience in franchising started with the organization’s acquisition of the Uniglobe FABCOS Travel franchise in 2003. The growth of franchising in South Africa has contributed immensely to the economy. According to experts, about 400 bona fide franchisors, operating about 25 000 franchisees, serve the local market. The most recent survey, commissioned by NAMAC Trust (which is now an arm of SEDA) and carried out during 2004 reveals the following picture:

Franchise Census 2004

INDUSTRY SECTOR	SALES R million	% OF TOTAL SALES
Automotive products and services	7 302,07	5,65%
Building and home maintenance	5 906,48	4,57%
Business to business supplies	521,99	0,40%
Education and training	615,42	0,48%
Fast food / take-out	7 894,68	6,11%
Health and beauty services	2 591,41	2,00%
Other business sectors	6 820,76	5,28%
Real estate agencies	1 923,61	1,49%
Restaurants / sit-down	3 532,64	2,73%
Retail incl. convenience stores	39 514,65	30,56%
Video rental and entertainment	448,60	0,35%
Petrol supplies	52 219,44	40,40%

 

Using the above figures as base performance and adjusting them by 25% per annum suggests that by now, the combined sales of South Africa’s franchised networks have exceeded the R200billion per annum mark. This notwithstanding, potential for ample growth continues to exist. This is supported by the fact that while in the USA, about 50% of all retail transactions (including petrol supplies) are carried out through franchise networks, our franchise sector accounts for an estimated 12%.
FABCOS has developed a franchising business model covering a wide range of franchises.

Dairy Franchise

The FABCOS Dairy Franchise model is based on the delivery of milk from FABCOS farms and the surrounding dairy farms to FABCOS members who own shops to sell to the consumers. The Milk and dairy products are transported through refrigerated tankers to the holding depots closer to FABCOS member shops. All hygienic precautions are taken into account in the value chain. The Dairy Franchise enables FABCOS members to participate in the production, collection and distribution of the dairy produce to formal franchise stores owned and managed by our members.

Butchery Franchise

The Butchery Franchise is supported by FABCOS’ livestock farms. FABCOS members who are livestock farmers are encouraged to participate by supplying meat and becoming franchisees.

Tavern Franchises  

FABCOS has piloted an internal franchise at three sites in the East Rand and has also identified a number of successful tavern franchises that SATA members have access to at affordable prices.

Grocery Retail Franchises

Together with large wholesalers, a number of grocery retail franchises have been identified for members of the Traders’ Association.

Fuel Filling Station Franchises

FABCOS facilitates and supports members in accessing franchising from national fuel retail suppliers in South Africa.

Dairy Franchises

The dairy franchise is internally developed and has been running successfully in Kroonstad. Interested members are encouraged to participate as franchisees.

Microtelco Franchises

This franchise is intended to share the opportunities within the lucrative telecoms sector with members by facilitating the establishment of “microtelco” businesses with their roots in the community. The microtelco business is a unique package of products and services which combine to present a genuine commercial opportunity for members of FABCOS. Members with existing businesses can tap into this as an additional income generating stream. Microtelco businesses offer cellular contracts, pre-paid airtime, community pay phones and internet access.

 

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