SA Franchise Brands welcomes Thabo Mokgatlha of The Fish & Chip Co. Kuruman to share some aspects on being a Franchisee.
What questions should prospective franchisees ask themselves before buying a franchise?
It is important to know what sector of the market the franchise is targeting. This will give you an indication of the size of the market in the area you intend to operate. It also allows one to identify the number of possible competitors in the area. The cost of the franchise is also worth considering as it affects your decision in as far as ones Return on Equity is concerned. The on-going franchise fees are also an important factor in the equation.
What made you decide to buy a franchise?
Franchising in general has proven to be successful as consumers seem to be brand conscious in the food and beverages space. The set up of the store, marketing and advertising, staff training are done by the franchisor, which is very helpful. Well run franchises which are not too expensive also create sustainable employment opportunities, especially in far out and rural communities
How important is it to investigate a franchise and what criteria did you use?
It is important to visit existing stores at different times to get a sense of the actual business case and to also taste the food (or test the product or service offering as the case may be).A friendly discussion with current franchisees about their experiences is also recommended as one quickly gets a sense of the kind of business you are going into, the support or lack thereof from the franchisor and the effort required to make the business a success.
What made you buy a Fish & Chip Co. franchise?
There were negative reports in the media about a rival Fish and Chips franchise that caught my attention and immediately made me decide that there was an opportunity to do something work from a competing franchisor (in this case the Fish and Chip Co.). Given that i believed that the majority of South Africans would relate to the menu, the price of the products offered was affordable in my view and the franchise set up costs were relatively low, the Fish and Chip Co. investment seemed very attractive. The Payback period is not too long and since the franchise was bought by Taste Holdings just prior to me investing, I take a view that the franchise was successful if it caught the attention of Taste Holdings to a point of them purchasing it.
What early challenges did you face?
Prior to setting up shop, the single biggest challenge was finding the right place/spot. I am convinced that at the time only a few people would even consider Kuruman as a place to set up shop. Due to electricity related problems we had to invest in gas infrastructure to supplement the power supply.
What training and support does the Franchisor provide you with?
Staff was exposed to theoretical and practical training, and had to write an examination at Head office. After passing their exams, the franchisor arranged for staff to do training for a week at a nearby existing store. The franchisor also sent a mentor for a week after the store opened, which guided the team and laid the foundation for a successful operation.
How important is the Franchisee’s relationship with the Franchisor?
Without mentorship and guidance by the franchisor it would have been difficult to run a successful store. The relationship between the Franchisor and the franchisee is actually what creates the Franchise. Until a good relationship is created the word “franchise” is just but a word. The relationship between the two brings the word to life. It is important for franchisee to accept that the business is owned and run by them and that the franchisors role is supportive i.e. franchisors don’t own our stores but enable us to benefit from their support structures and ensure that we enjoy the benefits associated with economies of scale from a purchasing and marketing point of view.
What advice would you give to prospective franchisees?
As a franchisee you need to be regularly present at the store and have passion for working with people. Keep your staff and customers happy and they in turn will ensure that you get the required return on investment. As much as one has the franchisors support, it also takes a lot of effort to succeed in the franchise space.
