Future of franchises
FASA said despite over 12% of business activity currently going the franchise route in South Africa compared to over 50% in the US, the SA franchising has the potential to grow.
But the main fear of many existing businesses today is whether their respective businesses are franchiseable, and if they are sustainable and profitable once franchised, especially in this post-recession era.
However, economist Sizwe Nxedlana of FNB Commercial said there is reason to be optimistic about the future now that the global economy, including the SA economy, has come out of the recession and has begun to show signs of growth.
Nxedlana said, however, that household consumption expenditure and fixed investment remain subdued - at1.4% and -0.9% in the first quarter of 2010 respectively.
Nevertheless, he said despite retail sales volumes being weak at the moment, consumer confidence has risen, according to a recent FNB survey, which he said is a good leading indicator that the future looks bright.
Dion Chang, of Flux Trends, who spoke about the empathetic economy, said that the end of the recession has made people to ask questions about accountability, social responsibility and transparency.
He also said the consumer revolution has made people question the provenance of products, has shifted values systems and pushed many consumer to seek value for money.
While delegates listened to various presentations painting a bright picture of the business landscape upstairs, the expo on level one resembled a flea market, with people moving from stand to stand to have a look at various products being showcased and seeking information on how to buy a franchise.
‘Unusual' exhibitors included the Competition Commission of South Africa, which has its stand at number A6.
Asked about their organisation's participation at the expo, a Competition Commission official told Bizcommunity.com: “We are here because we are promoting fair competition in this sector through pro-competitive business practices, while discouraging anti-competitive conduct.
“This requires us to monitor the markets to ensure that there are no unreasonable barriers for SMMEs and firms which enter such markets.”
Foreign exhibitors included the United Arab Emirates (UAE) Foreign Trade Mission. Syed Waqas Ahmed, civil engineer for Tents and Public Shades (based in Abu Dhabi), said: “We are excited to attend this expo as we have been studying the SA market for some time with the aim of investing here.”
The International Franchise Expo (IFE), which is the force behind the expo, has said it has in the past 16 years delivered thousands of qualified buyers to leading edge franchisors in Africa.
The SA franchising sector contributes about R259 billion to the GDP every year to the country's Gross Domestic Product (GDP).
