This month’s expert
Michele Fourie is the co-founder of South Africa’s first francised frozen yoghurt bar. Initially started as a stand-alone business, sheer demand saw the concept swiftly franchised.
How did you convert to a franchise?
Conversion was self-funded by Wakaberry’s three shareholders. The initial expansion was out of necessity as the first and second company stores were battling to handle the foot traffic. The Wakaberry model didn’t really change, but the internal structures needed to change. We brought on excellent head office staff, and set about solidifying the operations procedures for franchising.
What kind of professionals did you need?
While we did most of the conversion ourselves, we consulted a corporate attorney with franchising experience. We brought on an accountant, secretary and a brand manager, and now have a staff contingent of 13. We’re still relatively small, but work hard in our fields to keep the brand growing well.
Was it an expensive exercise to convert?
The conversion itself wasn’t that expensive, which may be different for others, but it was challenging keeping up with our supply and demand needs as we opened more stores.
To get the best prices on products and equipment we often had to buy in bulk. We’d be funding an entire container of goods which would take several months to recoup, so we needed money to float orders. In the beginning, the expenses of running the franchise as a holdings company outweighed the income in royalties. For the first 18 months we funded expenses ourselves.
How did you determine fees and start-up capital?
We did a tremendous amount of research on franchise models and market-related pricing. Initially, start-up capital was challenging because a lot of the fixtures and fittings were prototypes and costing on an individual scale was difficult. We were always completely honest with franchisees about not having all the answers. They respected and appreciated the honesty. Now we’re a lot more accurate.
What is your expansion strategy?
It’s simple: Quality over quantity. Our franchisees make a substantial business investment, and it’s our responsibility to ensure we’re giving them the best opportunity to succeed.
That starts with selecting the right franchisee, finding the ideal location, providing thorough training and support, and maintaining infrastructure and brand integrity.
How did you set up a training programme?
We worked at the first store and passed on the knowledge of everything that worked and didn’t work to the staff so that mistakes wouldn’t be repeated. Having pioneered the self-serve frozen yoghurt business in the country there was no one to look to.
Our first to market status sometimes meant learning from trial and error, which is both exciting and risky. When it was time to pass it on to staff members we were well equipped to share with them some fundamental operational lessons.
When we expanded to franchising, it felt like starting from the beginning again: Every store roll-out was an opportunity to learn. There were some operational elements that we accepted needed changing, and we found this through practice.
How has your role changed since becoming a franchisor?
We don’t have the same opportunity to work in our two franchisor-owned businesses as we did when we first opened. Our responsibility has evolved too.
We realised that we needed to bring in people who were qualified in their respective fields and believed in our brand as much as we did. Once we found the right personnel, it allowed us to be operational and strategic. One cannot work without the other.
A business that has no strategy is a business working with no direction.