With 138 stores established in just five years and an average annual growth of 55% year on year since its inception in June 2011, Montagu Trading Company (Pty) Ltd, is possibly one of South Africa’s fastest growing franchises. The franchise recently held their 5th birthday celebration where a vision was cast to go from good to great and beyond.
The brand has a well established reputation as a specialist supplier of the widest range of premium dried fruit, nuts and seeds to the South African market. With 138 stores set up within five years, and about 40% of franchises owned by a total of 10 investors who saw the potential ROI of investing in more than one store, Montagu is fast becoming a brand to take note of.
“The Montagu franchise network has allowed 80+ individual investors to earn a reasonable return on their investment. Further than that we have, on average, created three sales positions within each sales outlet. And according to our estimations this has turned into 400+ new jobs nationwide,” says Hannes Jansen, CEO of Montagu Dried Fruit and Nuts.
Such tremendous growth has not been without its challenges, especially for a brand of Montagu’s standing, but the franchise has proved that business success can be achieved in South Africa despite economic difficulties. “The challenges were numerous, but with each challenge we became more resilient,” he says.
South Africa’s Current Economic Landscape
A survey conducted by the Franchising Association of South Africa (FASA) in 2015 indicated that while activity in the South African franchising sector is expected to increase in 2016, it won’t be easy:
“With South Africa moving closer to a recession and possible credit-rating downgrade to junk and as investors lose faith in our struggling economy, the franchise sector will have to dig deep to weather this latest storm,” FASA said.
However, the franchise sector holds plenty of weight as far as the economy is concerned. At the beginning of this year, the franchise sector’s contribution to GDP stood at 12.5% and was valued at an estimated R456 billion. The survey further indicated that there are currently 627 franchisors in South Africa. What’s more, 72% of franchisees surveyed indicated optimism for South Africa’s economic future, despite the current financial landscape.
The Value of an Effective Franchise Model
Jansen believes that franchising is a powerful, rewarding means to encourage entrepreneurship in South Africa, empower entrepreneurs and build the South African economy. Furthermore, he says that the risk of running a business is minimized if investors make use of a trusted and proven model. “That’s why franchises work so well,” he explains.
“The central management of a national network of stores, each with varying working hours and diverse cultures, is not sustainable. Franchising allows sales outlets to be owned and managed by entrepreneurs who have a vested interest in making their business successful,” he says.
Jansen says that franchisors should follow a trusted and proven product-based model which is simple and effective. He has identified four key areas that set a franchise up for success:
- A large range of products and services from sustainable sources.
- Responsibility for national brand building, product awareness, promotions and events marketing.
- An innovative product range.
- Information that assists franchisees in selecting the right trading sites and leasing criteria.
“The more we have business concepts evolving through franchise concepts, the more we can bring people into the formal market,” he says.
Jansen is certain that the growth achieved has come down to a combination of solid, face-to-face logistical support for their franchisees and a transparent approach to business.
“We have helped investors with great entrepreneurial potential set themselves up within our network, and we believe that we are reaping the harvest of that foundational support,” he says. According to Jansen, franchising is certainly well worth the discerning investor’s consideration as it supports job-creation and economic growth. By cutting out a number of the time-consuming setup processes and paperwork that a start-up would have to plough through alone, Montagu franchisees are able to launch into the market place faster and start contributing to the economy.
The Montagu Trading Company has cast a vision to go from good to great and beyond over the next five years. An additional 70 sites have been earmarked for future retail outlets, and extensions into the UK and US are currently being explored.
About Montagu Dried Fruit and Nuts
Montagu Dried Fruit and Nuts is a specialist supplier of the widest range of dried fruit, nuts and seeds to the South African market. Their desire is to see their franchisees thrive in their partnerships with the Montagu brand.
Their end goal is to help their customers support a healthier lifestyle. They have over 140 dedicated stores nationwide, manned by trained sales assistants who provide them with support and valuable information to make their buying decisions.
For more information on Montagu franchise opportunities:
Andre Myburgh (for Western Cape, Eastern Cape, KwaZulu-Natal and Northern Cape)
082 770 0561 | andre@mdfn.co.za
Tiaan Peens (for Gauteng, Limpopo, Mpumalanga and Free State)
063 686 5022 | tiaan@mdfn.co.za
