A taste for the Spur (franchise) life
Franchisee Donald Clarkson has spent the past 29 years with the Spur Franchise Company and has no plans on stopping any time soon.
With nine Spurs, four John Dory’s, and a RocoMamas under his watch, he is no stranger to the pressures of being a franchise owner. Thanks to the help of Nedbank, he is looking at expanding his business even more.
In this video, he discusses some of the challenges of working in the South African environment and the advantages of being a franchisee under the Spur brand.
In a country where the path to sustainable business ownership is notoriously difficult, franchising offers an opportunity to get a solid foothold in the South African market. But the barriers to entry remain high with initial costs proving to be too steep for many aspiring franchisees.
According to the fifth Franchising Association South Africa (Fasa) independent survey, undertaken among local franchisors, ownership by previously disadvantaged individuals (PDI) for 2017 was given at 17%, down from 18% in 2016.
Notably, 56% of the survey sample did not have any PDI ownership in their businesses at all.
Business ownership by women stood at an average of 25%. The sectors with the highest incidence of female business ownership are health, beauty and body care as well as childcare, education and training.
As a whole, the estimated turnover for the franchise market is R587 billion, which is equivalent to 13.3% of South Africa’s GDP. At 29%, the highest turnover generated is by the fast food and restaurants sector. The employee count was pegged at 343 319, with the retail sector being the biggest employer. Sixty-five percent of employees are black, 24% white, 6% coloured and 5% Indian. The number of black employees has increased by 8%.
The average amount of working capital required when buying a franchise is estimated to be R598 000. The amount required as working capital varies considerably depending on the franchise system.
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