10 minute read
Trends
Morne Cronje
WHAT’S TRENDING?
With the pandemic ebbing and fl owing like the tide, and uncertainty still the order of the day, ANTHONY SHARPE looks at the current key trends in the franchise sector
Floundering businesses, lay-offs and a loss of faith in traditional work styles have had a positive upshot: a growing number of people are embracing entrepreneurship with enthusiasm.
“A lot of companies are downsizing or employees are choosing to leave on their own terms, so there’s been an uptick in people looking at new avenues, speaking to franchisors and wanting to enter the market,” says FNB head of franchising Morne Cronje. We’ve always seen that franchising is a safe way to enter entrepreneurship because you’re in business for, but not by, yourself.”
Hot Dog Café general manager Nicollette le Roux says that since December 2020 the company has noticed an increase in franchisee queries, but with little to no follow-through. “We believe that people know and appreciate that franchising offers the support and know-how one hopes for when venturing into a new business, but the uncertainty of the times is making them indecisive. Many people want to buy businesses, but the fear of investing hard-earned money prohibits them from taking the next step.”
ACQUISITIONS BY LARGER FRANCHISEES
South Africa’s economy wasn’t exactly roaring pre-COVID-19, and several franchisees were in distress, says Cronje. “The second lockdown hurt many franchisees who used up their capital to weather the fi rst storm. It’s diffi cult for them to stay afl oat, and we are seeing a trend where larger, more successful franchisees are looking to acquire other stores. I think that moving forward we’ll see this at a franchisor level too.” Le Roux says they’ve defi nitely noticed such a trend. “Many of our franchisees are aware of the opportunities within the brand and are always looking for ways to increase their portfolios. This depends on the franchisee, their fi nancial position and their vision for the business.”
EMBRACING E-COMMERCE
COVID-19 or not, our online habits are here to stay, and businesses need to be ready. This has forced many franchises to fast-track ideas that might have been on the backburner, says Franchising Association of South Africa chair Pertunia Sibanyoni. “For example, a number of education and training franchises were forced to operate online over the past year and, while doing so, established alternate online courses that will continue into the future. Real estate franchises have moved to online showings and this opens up different franchise options. Those in the food sector, including some of the big names, are developing ‘dark kitchens’, drive-throughs and delivery services to supplement their main offerings.” Cronje says the restaurant industry is a prime example of this trend. “Before the pandemic, very few restaurants had a comprehensive takeaway offering. Now if a restaurant or fast food establishment is Pertunia Sibanyoni not fully operational on an e-commerce platform, it’s missed the boat.”
FRANCHISING, FNB
Aneez Amod, MD of Jimmy’s Killer Express, says businesses need to take advantage of delivery service providers such as Mr D Food, Uber Eats and the like that already have the necessary vendor- and user-friendly apps. “Creating one’s own app is not feasible for fast food franchise outlets, so making use of established service providers works out well.”
HOME IS WHERE THE OPPORTUNITY IS
People are spending more time than ever at home, and savvy franchises need to fi gure out how to reach isolated consumers. Amod says fast food franchises should direct more of their marketing activities at getting potential customers to make use of online ordering systems or call-and-collect services.
“It is key to fi nd new ways of distributing your product to the customer,” says Kauai franchise executive Guy le Ray-Cook. “Convenient access to your brand coupled with credibility or brand trust should mean you can keep your brand front of mind for your customer base, if you get the delivery channel and product extension right.”
to the customer.” – Guy le Ray-Cook, Kauai franchise executive
Businesses need to embrace online consumer trends, trends beyond COVID-19.
Swypa Delivery
FROM SMALL BEGINNINGS TO A BIG FUTURE
Tembisa-based Swypa Delivery could be the answer to SA’s delivery prayers. the answer to SA’s delivery prayers. By TREVOR CRIGHTONBy TREVOR CRIGHTON
Necessity birthed invention in
Tembisa on Gauteng’s East Rand in 2019, when Boitumelo Monageng and Thabang Kgopane founded Swypa Delivery, an on-demand delivery service for township-based businesses that were underserviced by existing delivery platforms. Monageng and Kgopane couldn’t possibly have foreseen how quickly the arrival of the COVID-19-related lockdown would make their business a necessity, rather thana luxury.
Swypa was initially established to offer logistics solutions to assist with the delivery of food, alcohol, laundry, motor spares, groceries, parcels, medicine, lifestyle and clothing brands, and business support. Lockdown saw the service expanding into deliveries of more types of food, masks and hand sanitiser. Now Swypa offers delivery support to over 40 local businesses, as support to over 40 local businesses, as well as takeaway and fast food brands well as takeaway and fast food brands including Chicken Licken, KFC, Galito’s, including Chicken Licken, KFC, Galito’s, Nando’s, McDonald’s, Steers, Roman’s Nando’s, McDonald’s, Steers, Roman’s Pizza and Debonairs. Pizza and Debonairs.
“We fi rst started deliveries “We fi rst started deliveries with four scooters and the with four scooters and the call centre was mainly run call centre was mainly run by Kgopane on most days,” by Kgopane on most days,” says Monageng. “We’ve says Monageng. “We’ve now built a state-of-thenow built a state-of-theart call centre run by four art call centre run by four call centre agents and our call centre agents and our delivery team has grown to delivery team has grown to 15 drivers. We initially had 15 drivers. We initially had 20 orders daily, but our 20 orders daily, but our numbers have grown to numbers have grown to 6 000 orders monthly.” 6 000 orders monthly.”
Swypa’s current Swypa’s current footprint covers footprint covers
– BOITUMELO MONAGENG, CO-FOUNDER, SWYPA DELIVERY
Tembisa and surrounding areas, including Rabie Ridge, Chloorkop, Terenure, Norkem Park, Bircheleigh North, Clayville, Olifantsfontein, Ebony Park, Glen Austin, Klipfontein View and Waterfall Estate, and the company plans to expand into Soweto. “We hope to grow the business into a free-to-use township business-focused delivery service for consumers nationwide,” says Monageng. “We’re exploring the franchising route as a way to help establish that nationwide footprint and connect more people with more townshipbased businesses.” Deliveries are co-ordinated through WhatsApp and the call centre, but a mobile application will be rolled out soon.
Sizzling good chicken from the successful Galito’s brand
Galito’s unique flame-grilled flavour and unwavering focus on product quality and affordability has fuelled its success throughout South Africa and the world
Galito’s is all about fresh, full-flavoured, flame-grilled chicken! If you would like to be part of a brand that is all about making customers consistently happy, one chicken at a time, then make sure you get in touch. The Galito’s story began in the Mpumalanga city of Mbombela (Nelspruit) when the first Galito’s restaurant opened its doors in 1996. With a powerful combination of great tasting chicken, excellent service and pride, Galito’s soon became a huge success.
Within a few short years, Galito’s had become a Lowveld favourite and with the valued participation and support of close friends,
Galito’s had opened a closely-knit family of eight restaurants by mid-2002.
During 2003, Galito’s decided to share its unique flavours with the rest of South Africa. It was at this point that the Galito’s brand began to develop and franchising efforts took off in earnest.
With founder Louis Germishuys still at the helm, Galito’s has continued to expand and now operates in more than 16 countries internationally, with 163 stores and counting — across Africa into Malaysia, Pakistan, the UAE, India, Canada and most recently
Kazakhstan with two more countries confirmed for 2020.
Galito’s is an example of a strong, stable
South African franchise investment that has stood the test of time, constantly innovating to include different store formats from casual dining and take-away to food court, drive-thru and fuel station models.
The menu has been carefully crafted to cater for a broad range of customers, using only the best ingredients in Galito’s original marinade recipe. Each chicken is carefully marinated for a minimum of 24 hours and then flame-grilled, ensuring the authentic flavours of Galito’s are retained and enjoyed daily.
WHAT YOU NEED TO BE A FRANCHISEE
The ideal franchisee candidate plans to operate his restaurant as an “owner-managed” business and has the following qualities: • Demonstrates entrepreneurial skills, yet also shows the ability and willingness to be a team player. • Must consider the business as a long-term investment, show commitment and have a loyal and consistent character. • Must be a “go-getter” with high energy levels and a strong will to succeed. • Be people-orientated with excellent interpersonal and communication skills. Must have a love for working with people and be capable of gaining and maintaining a rapport with the client base through being friendly, patient and tolerant, yet firm.
Galito’s is an example of a strong, stable South African franchise investment that has stood the test of time, constantly innovating to include different store formats.
INVESTMENT AND RETURN ON SALES
• The Galito’s financial model recommends a maximum business gearing of not more than 50 per cent. Therefore, we require potential applicants to have a minimum of half of the total cost of the store as unencumbered funds (money not secured by any creditor), togetherwith sufficient collateral to secure a business loan for the balance of the required set-up cost. R300 000 is recommended for operating capital. • A Galito’s restaurant enjoys a gross profit of 56 per cent+ (including packaging costs), with expected Return on Sales (ROS) ranging from 15 to 20 per cent, prudently modelled on turnovers of R300 000 to R600 000+ respectively.
• Must be able to manage others and have good motivational skills. • The restaurant business often requires long hours and hard work, therefore, the franchisee must have the stamina and strength required to operate a Galito’s store. • A potential Galito’s franchisee need not have any formal qualification, but must have a matric certificate. It is also essential for the candidate to be computer-literate. • The applicant would need to be creditworthy and have available financial resources.
SET-UP COSTS
An ideal Galito’s franchise restaurant is between 160m² and 180m² . The average set-up cost of a store is between R10 000–R12 000 per m²*. This amount includes: • Initial franchise joining fee • Restaurant design • Franchisee assessments cost and project management • Internal building construction from plumbing and electrical to tiling • All operational equipment • Furniture and fittings • Point of Sale system • External and internal signage and menu boards • Staff training and uniforms
Please Note: This cost may be subject to review, depending on the floor size, initial premise’s condition and location.
Franchise Fees
• A royalty of five per cent is payable on a monthly basis. • Brand development contribution of four percent of turnover is payable on a monthly basis.
For more information:
www.galitos.co.za
